4 steps to set up an accounting system for your business
Below is a 4-step guide to setting up an accounting system for your business for business managers. The guide focuses on strategic management issues. For detailed implementation issues, please refer to the detailed article.
To set up an effective accounting system, you must design an operational plan, select the right accounting software, and train the users of the system.
You can change the system with pre-planned additions if your system is set up for your specific business needs. Your accounting system should provide you with information on how much and from what source your business earns and where and how much it costs to use.
Step 1: Make an activity plan suitable for your company's size, products and services
First, you must plan operations that are appropriate for your company's size, products, and services. Based on this plan table, make the concretization into the necessary accounting database.
This plan needs clarity of details by consulting with the people in charge of bringing money to the company and those responsible for approving the company's spending. Determining the purpose, income and expense approval limits, income and expense categories requires approval from management appropriate to the operating structure of the business.
For example, you must determine if income is classified by source, such as Company X and Company Y, by type of service or product, or by a specific service or product.
Step 2: Set up the workflow
Establish work procedures and rules for who can use the system and for what purposes.
In addition to the implementation process, you need to develop regular monitoring procedures to prevent problems and ensure data integrity.
Step 3: Select the appropriate accounting software
Choosing accounting software after trying different programs that suit your company's requirements, it should be easy to understand and use.
Some companies may require a consultant to design a system from scratch or modify an existing system. Most small businesses will be able to find an existing program from many available in the market.
Step 4: Recruit, assign and train personnel to participate in the accounting system
- Identify who participates in the accounting system, the tasks, roles and rights of the participants.
- Define management decentralization such as: who can perform data entry, who can check and who generates reports.
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