When talking about the best business accounting software, you must first know the relationship between finance and accounting. Conceptually speaking, they are closely related to the extent that accounting is an important input in financial decision making and there are key differences in viewpoints between them. Accounting is a necessary input into finance. That is, accounting is a sub-function of finance.
Accounting generates information or data relating to the operations or activities of the firm. The end-product of accounting constitutes financial statements such as the balance sheet, the income statement (profit and loss account) and the statement of changes in financial position (sources and uses of funds statement). The information contained in these statements and reports assists financial managers in assessing the past performance and future directions of the firm and in meeting certain legal obligations, such as payment of taxes and so on. Thus, accounting and finance are functionally closely related.
But there are key differences between finance and accounting. The first difference relates to the treatment of funds while the second relates to decision making. The viewpoint of accounting relating to the funds of the firm is different from that of finance. The measurement of funds (income and expenses) in accounting is based on the accrual system. For instance, revenue is recognized at the point of sale and not when collected. Similarly, expenses are recognized when they are incurred rather than when actually paid. The accrual-based accounting data do not reflect fully the financial circumstances of the firm. The viewpoint of finance relating to the treatment of funds is based on cashflows. The revenues are recognized only when actually received in cash (i.e. cash inflow) and expenses are recognized on actual payment (i.e. cash outflow).
Finance and accounting also differ in respect to their purposes. The purpose of accounting is collection and presentation of financial data. It provides consistently developed and easily interpreted data on the past, present and future operations of the firm. On the other hand, financial manager's major responsibility relates to financial planning, controlling and decision making. Thus, in a sense, finance begins where accounting ends.
Article Source: http://EzineArticles.com/210164
Friday, October 14, 2011
Small Business Accounting Software
Your business, no matter how small, needs an effective accounting management system to sustain its day-to-day viability and establish its long-term financial goals. But when you are already multitasking as the CEO, the manager, and the salesman, you don't really have time to be an accountant too, do you? Yes, actually, you do.
With a good small business accounting software program, you can still manage your cash flow hands on, without spending too much time. A few clicks here and there, and you can forecast revenues, pay bills, and generate reports. But what functionalities should you look for in accounting software? What do you really need and what can you do without? Read on for some tips.
Look for user-friendly software. Choose accounting software with an interface that resembles its traditional paper counterparts so that you can immediately navigate your way around it. The more familiar the layout of the software is to you, the easier you can intuitively explore its functionalities.
Internet and e-commerce features can also be important. If your small business relies on sales and orders via the worldwide web, you definitely need accounting software that seamlessly connects to e-Commerce functionalities. Find something that you can easily hook up to your bank's online payment portal, for example, so you can automatically track payments made to you and bills you have to pay.
Search for compatibility with frequently used programs. If most of your records are Windows based, find small business accounting software that easily synchronizes with Microsoft Excel and other Microsoft Office applications. Such a feature will let you integrate your existing records without the risk of corrupting data. There are also specialty accounting software programs available for other platforms.
Examine the professional reports included in the software. Beware of some software packages that can generate hundreds of kinds of reports - you probably won't use more than half of them, so why pay the extra price? Concentrate on essential reports instead, such as statements needed for tax filing and time-billing reports, if you use such.
There are other extras worth considering. If your business is quickly expanding, it might be a good idea to invest in expandable, multiple-user accounting software that integrates payroll functionalities, inventory tracking, job costing, and other productivity features. These types cost a little more, but are definitely necessary for any fast-growing small business.
With a good small business accounting software program, you can still manage your cash flow hands on, without spending too much time. A few clicks here and there, and you can forecast revenues, pay bills, and generate reports. But what functionalities should you look for in accounting software? What do you really need and what can you do without? Read on for some tips.
Look for user-friendly software. Choose accounting software with an interface that resembles its traditional paper counterparts so that you can immediately navigate your way around it. The more familiar the layout of the software is to you, the easier you can intuitively explore its functionalities.
Internet and e-commerce features can also be important. If your small business relies on sales and orders via the worldwide web, you definitely need accounting software that seamlessly connects to e-Commerce functionalities. Find something that you can easily hook up to your bank's online payment portal, for example, so you can automatically track payments made to you and bills you have to pay.
Search for compatibility with frequently used programs. If most of your records are Windows based, find small business accounting software that easily synchronizes with Microsoft Excel and other Microsoft Office applications. Such a feature will let you integrate your existing records without the risk of corrupting data. There are also specialty accounting software programs available for other platforms.
Examine the professional reports included in the software. Beware of some software packages that can generate hundreds of kinds of reports - you probably won't use more than half of them, so why pay the extra price? Concentrate on essential reports instead, such as statements needed for tax filing and time-billing reports, if you use such.
There are other extras worth considering. If your business is quickly expanding, it might be a good idea to invest in expandable, multiple-user accounting software that integrates payroll functionalities, inventory tracking, job costing, and other productivity features. These types cost a little more, but are definitely necessary for any fast-growing small business.
QuickBooks - Invoices vs Sales Receipts - What's the Difference?
Invoices and Sales Receipts are not quite the same thing in QuickBooks. Although they both record sales information, that is where their similarity ends. Here is a breakdown of what each does.
Invoices
With Invoices you have more flexibility than with Sales Receipts:
Estimates or Sales Orders are easily converted to Invoices with a click of the mouse
With Invoices, all customer sales information is recorded in the Customer:Job list
Customers may owe the business money when Invoices are used
Customer payment information is entered as a separate step on a separate screen
Sales Receipts
Sales Receipts are a little more rigid, but are certainly appropriate in many circumstances:
Although you may use Estimates and Sales Orders, they cannot be electronically converted to Sales Receipts
With Sales Receipts, QuickBooks cannot track if the customers owe the business
Sales history is not tracked in the Customer:Job list when Sales Receipts are used
Customers' payment information is entered into the Sales Receipt screen, at the time the sale is recorded
Which to Use - 3 Tips
1. As a general rule, businesses that can use Sales Receipts can also use Invoices. The reverse is not necessarily true - if your business should use Invoices, it should not use Sales Receipts.
2. Use Invoices if you need to use Estimates or Sales Orders, or you want to allow your customers to pay at a later date than the date of the sale.
3. Use Sales Receipts if you don't need to track each indivudual customer's sales history, and if you always receive the customer's payment at the time of the sale.
Invoices
With Invoices you have more flexibility than with Sales Receipts:
Estimates or Sales Orders are easily converted to Invoices with a click of the mouse
With Invoices, all customer sales information is recorded in the Customer:Job list
Customers may owe the business money when Invoices are used
Customer payment information is entered as a separate step on a separate screen
Sales Receipts
Sales Receipts are a little more rigid, but are certainly appropriate in many circumstances:
Although you may use Estimates and Sales Orders, they cannot be electronically converted to Sales Receipts
With Sales Receipts, QuickBooks cannot track if the customers owe the business
Sales history is not tracked in the Customer:Job list when Sales Receipts are used
Customers' payment information is entered into the Sales Receipt screen, at the time the sale is recorded
Which to Use - 3 Tips
1. As a general rule, businesses that can use Sales Receipts can also use Invoices. The reverse is not necessarily true - if your business should use Invoices, it should not use Sales Receipts.
2. Use Invoices if you need to use Estimates or Sales Orders, or you want to allow your customers to pay at a later date than the date of the sale.
3. Use Sales Receipts if you don't need to track each indivudual customer's sales history, and if you always receive the customer's payment at the time of the sale.
QuickBooks - Mid-Month Bank Reconciliations
In QuickBooks, sometimes the check register can go awry between the monthly bank reconciliations. Here are simple directions to reconcile the check register, even without the regular monthly bank statement:
1. From your web browser, go to your bank's website and print a detailed listing of all banking transactions that have occurred since the last time you reconciled (presumably since the last statement).
2. Go through this printout and make sure all transactions that appear on it also appear in QuickBooks. ATM withdrawals, automatic payments, and other transactions of this type sometimes get overlooked - be sure these are current in QuickBooks.
3. From the Banking menu in QuickBooks, select Reconcile. The Begin Reconciliation window opens.
4. Select the correct account, enter today's date, enter the ending balance from the printout, and enter any banking fees that may appear on the printout that have not already been entered into QuickBooks. Click Continue. The Reconcile window opens.
4. In the same way that you would balance a regular bank statement, with the printout in hand, go through the Reconcile window and place a checkmark next to any item that appears in both the printout and in QuickBooks. With a pencil, write a checkmark on the printout next to any item that you also checked in QuickBooks.
5. When you have checked all items from the printout, look at the Difference (located in the bottom right corner of the Reconcile window). It should be zero. If it is, then you are finished. Do not click Reconcile Now. Instead, click Unmark All, then click Leave.
6. If the Difference amount is not zero, errors were made. Verify that all entries in QuickBooks match the bank's entries exactly; verify that all transactions from the bank printout have been entered into QuickBooks; verify that all entries that appear on the bank statement AND also appear in QuickBooks have a checkmark next to them; and verify that in QuickBooks there are no checkmarks on items that do not also appear on the bank printout.
A Difference amount that is positive means that a deposit is missing in QuickBooks, or that there are too many withdrawals or checks in QuickBooks. A Difference amount that is negative means that one or more withdrawals or checks are missing in QuickBooks, or that there are too many deposits in QuickBooks.
At this point, if you still cannot get the Difference amount to be zero, then you may need to call an experienced QuickBooks professional to help. Remember that accounting problems do not get better as time goes on, they get worse. If you need help, it is better and less expensive to get it before the problem gets too big or has gone on for too long.
1. From your web browser, go to your bank's website and print a detailed listing of all banking transactions that have occurred since the last time you reconciled (presumably since the last statement).
2. Go through this printout and make sure all transactions that appear on it also appear in QuickBooks. ATM withdrawals, automatic payments, and other transactions of this type sometimes get overlooked - be sure these are current in QuickBooks.
3. From the Banking menu in QuickBooks, select Reconcile. The Begin Reconciliation window opens.
4. Select the correct account, enter today's date, enter the ending balance from the printout, and enter any banking fees that may appear on the printout that have not already been entered into QuickBooks. Click Continue. The Reconcile window opens.
4. In the same way that you would balance a regular bank statement, with the printout in hand, go through the Reconcile window and place a checkmark next to any item that appears in both the printout and in QuickBooks. With a pencil, write a checkmark on the printout next to any item that you also checked in QuickBooks.
5. When you have checked all items from the printout, look at the Difference (located in the bottom right corner of the Reconcile window). It should be zero. If it is, then you are finished. Do not click Reconcile Now. Instead, click Unmark All, then click Leave.
6. If the Difference amount is not zero, errors were made. Verify that all entries in QuickBooks match the bank's entries exactly; verify that all transactions from the bank printout have been entered into QuickBooks; verify that all entries that appear on the bank statement AND also appear in QuickBooks have a checkmark next to them; and verify that in QuickBooks there are no checkmarks on items that do not also appear on the bank printout.
A Difference amount that is positive means that a deposit is missing in QuickBooks, or that there are too many withdrawals or checks in QuickBooks. A Difference amount that is negative means that one or more withdrawals or checks are missing in QuickBooks, or that there are too many deposits in QuickBooks.
At this point, if you still cannot get the Difference amount to be zero, then you may need to call an experienced QuickBooks professional to help. Remember that accounting problems do not get better as time goes on, they get worse. If you need help, it is better and less expensive to get it before the problem gets too big or has gone on for too long.
17 Electronic Medical Billing Software Red Flags for Chiropractic Office Audit
Dr. Ben Lerner, founder of Teach The World About Chiropractic and author of "One Minute Wellness," discovered a uniquely convenient way to educate thousands of chiropractors about coding compliance and audit risk reduction. "Compliance maintenance requires special skills and military discipline," says Dr. Lerner. "Webinars are ideal for audit risk management instruction because they deliver urgently needed education but require minimal investment in terms of time and cost."
According to Improper Medicare FFS Payment Report (2003), "Chiropractors have the highest provider compliance error rate in Medicare, filing claims incorrectly 30.6% of the time."
Increasing frequency of post-payment insurance audits and mounting severity of penalties, ranging from license suspension to heavy monetary fines, emphasize the need for effective and affordable education about compliant office management and audit risks.
"No insurance company offers protection against potentially enormous penalties in case of post-payment audit," says Jeff Randolph, Esq., Legal Counsel to the Association of New Jersey Chiropractors and a webinar author. "The severity of provider penalties following post-payment audit have escalated in the past two to three years from relatively non-adversarial audits and occasional return of payments to very high fines, suspension or loss of license, and imprisonment."
What is a Webinar on Billing Audit Risk?
If any chiropractic practice has a 30.6% chance of being audited and no insurance offers protection against audit risk, then the only rational way to protect the practice is to develop an in-house audit defense strategy.
Doctors and practice managers are looking for cost-effective and productive ways to learn better ways to manage their practice and revenue cycle. The key benefit of the webinar is its convenience - there is no travel required and important information is delivered in ninety-minute sessions that make it easy for even the busiest doctors to quickly gain important information on topics ranging from successfully implementing EMR systems, to understanding the real benefits and challenges of outsourced billing services, risk management of post-payment audits, and much more.
Webinars leverage Internet to bring together remote participants while viewing the same visuals or computer application. An audit risk webinar teaches chiropractors to build an effective and efficient in-house audit defense strategy and offers three-fold benefit to its participants:
Lower audit risk because of SOAP note compliance and audit exposure monitoring
Higher revenue because of more effective billing
Improved efficiency of patient flow management
Expert Content
A Chiropractic Audit Webinar has three parts:
Coding:
CPT (Current Procedure Terminology) Codes
E&M Codes
Modalities
ICD-9 Coding
Medical Necessity Documentation:
SOAP Notes
Treatment Plan
Audit Management:
Seventeen Audit Red Flags
Audit Exposure Monitoring
What to do if audited?
According to Improper Medicare FFS Payment Report (2003), "Chiropractors have the highest provider compliance error rate in Medicare, filing claims incorrectly 30.6% of the time."
Increasing frequency of post-payment insurance audits and mounting severity of penalties, ranging from license suspension to heavy monetary fines, emphasize the need for effective and affordable education about compliant office management and audit risks.
"No insurance company offers protection against potentially enormous penalties in case of post-payment audit," says Jeff Randolph, Esq., Legal Counsel to the Association of New Jersey Chiropractors and a webinar author. "The severity of provider penalties following post-payment audit have escalated in the past two to three years from relatively non-adversarial audits and occasional return of payments to very high fines, suspension or loss of license, and imprisonment."
What is a Webinar on Billing Audit Risk?
If any chiropractic practice has a 30.6% chance of being audited and no insurance offers protection against audit risk, then the only rational way to protect the practice is to develop an in-house audit defense strategy.
Doctors and practice managers are looking for cost-effective and productive ways to learn better ways to manage their practice and revenue cycle. The key benefit of the webinar is its convenience - there is no travel required and important information is delivered in ninety-minute sessions that make it easy for even the busiest doctors to quickly gain important information on topics ranging from successfully implementing EMR systems, to understanding the real benefits and challenges of outsourced billing services, risk management of post-payment audits, and much more.
Webinars leverage Internet to bring together remote participants while viewing the same visuals or computer application. An audit risk webinar teaches chiropractors to build an effective and efficient in-house audit defense strategy and offers three-fold benefit to its participants:
Lower audit risk because of SOAP note compliance and audit exposure monitoring
Higher revenue because of more effective billing
Improved efficiency of patient flow management
Expert Content
A Chiropractic Audit Webinar has three parts:
Coding:
CPT (Current Procedure Terminology) Codes
E&M Codes
Modalities
ICD-9 Coding
Medical Necessity Documentation:
SOAP Notes
Treatment Plan
Audit Management:
Seventeen Audit Red Flags
Audit Exposure Monitoring
What to do if audited?
Chiropractic Office Billing and Patient Relationship Management Software
Return patients generate approximately 80 percent of clinic's revenue. Patient Relationship Management (PRM, also known as CRM, for Customer Relationship Management outside of healthcare) can enhance financial performance of the clinic by helping retain current and attract new patients. Effective PRM uses integrated data using patient travel card (SOAP notes), frequency recommendations (care plan), and billing (charges, payments, and balance).
PRM is a data-driven and patient-focused methodology to strategic practice building and effective patient relationship development. PRM helps identifying new service needs and then designing care programs and office and billing processes to meet the needs.
PRM also helps providing timely, patient centered, and efficient care, emphasizing preventive instead of reactive care. A basic PRM system captures patient information during entire period of the care plan in terms of functional health improvement, care plan implementation, and billing.
Patient Relationship Management Principle
PRM includes a travel card (TC), treatment frequency measures, and billing balance. PRM system tracks changes in the travel card, in Frequency Recommendation summary, and in billing balance, and generates reports to alert office management about lists of patients reaching important thresholds. The office manager or the doctor can review such reports and respond according to practice development strategy, using call centers, Internet, direct mail, or personal conversations during office visits.
Electronic Travel Card
An electronic equivalent of a paper travel card (Electronic Travel Card, or ETC) contains complete information about patient's health and care history. It is similar to electronic medical record and subject to same HIPAA compliance regulations. ETC includes:
Numbers and dates of visits
SOAP notes for each visit
ICD-9 and CPT codes
Care frequency recommendation summary
X-rays and posture images
Frequency Recommendation
Frequency recommendation summary presents an interpretation of patient's compliance with doctor's recommendation in concise form and allows specification of PRM thresholds. Specifically, it has four parts:
Weekly treatment frequency recommendation, typically a single digit between 1 and 3
The number if weeks when the patient complied with the recommendation
The total number of weeks for a given recommendation
Care plan start date
Number of missed appointments along with documented reasons for missing an appointment
For instance, a frequency recommendation summary [3X: 3/13] means that treatment is recommended three times per week for thirteen weeks, and the patient complied three weeks out of thirteen.
A treatment plan then is a list of such frequency recommendation summaries, for instance,
[3X: 3/13], [2X: 15/15], [1X: 4/12].
In summary, Patient Relationship Management (PRM) can become a major differentiating factor in building successful and competitive chiropractic clinics. It requires integrated systems combining data about patient's health, care plans, and billing.
PRM is a data-driven and patient-focused methodology to strategic practice building and effective patient relationship development. PRM helps identifying new service needs and then designing care programs and office and billing processes to meet the needs.
PRM also helps providing timely, patient centered, and efficient care, emphasizing preventive instead of reactive care. A basic PRM system captures patient information during entire period of the care plan in terms of functional health improvement, care plan implementation, and billing.
Patient Relationship Management Principle
PRM includes a travel card (TC), treatment frequency measures, and billing balance. PRM system tracks changes in the travel card, in Frequency Recommendation summary, and in billing balance, and generates reports to alert office management about lists of patients reaching important thresholds. The office manager or the doctor can review such reports and respond according to practice development strategy, using call centers, Internet, direct mail, or personal conversations during office visits.
Electronic Travel Card
An electronic equivalent of a paper travel card (Electronic Travel Card, or ETC) contains complete information about patient's health and care history. It is similar to electronic medical record and subject to same HIPAA compliance regulations. ETC includes:
Numbers and dates of visits
SOAP notes for each visit
ICD-9 and CPT codes
Care frequency recommendation summary
X-rays and posture images
Frequency Recommendation
Frequency recommendation summary presents an interpretation of patient's compliance with doctor's recommendation in concise form and allows specification of PRM thresholds. Specifically, it has four parts:
Weekly treatment frequency recommendation, typically a single digit between 1 and 3
The number if weeks when the patient complied with the recommendation
The total number of weeks for a given recommendation
Care plan start date
Number of missed appointments along with documented reasons for missing an appointment
For instance, a frequency recommendation summary [3X: 3/13] means that treatment is recommended three times per week for thirteen weeks, and the patient complied three weeks out of thirteen.
A treatment plan then is a list of such frequency recommendation summaries, for instance,
[3X: 3/13], [2X: 15/15], [1X: 4/12].
In summary, Patient Relationship Management (PRM) can become a major differentiating factor in building successful and competitive chiropractic clinics. It requires integrated systems combining data about patient's health, care plans, and billing.
Business Accounting Programs: What's the Right Choice for Your Business
There was a time when small businesses could run their operations with little to no book keeping or accounting practices. But with more and more people leaving their 9 - 5 job and opting to take their chances running their own small business either from home or an office is driving the demand for accounting programs. Countries all over the world are reporting an increase in small business and these small business help make up a countries GDP thus helping fuel their economies. The need for accounting programs for small business has never been greater as it is today, in fact most businesses can not get away with not having some sort of accounting program in place, to help run the day to day finances of their businesses.
Each business is different in regards to accounting needs. Some businesses choose to outsource most of its accounting duties during tax season while others have accounting programs ranging from simplistic accounting programs to advanced accounting programs. Stricter government regulations over the years have made it mandatory for all businesses to properly file and abide to accounting regulations in place.. It is imperative that a businesses accounting program is up to par in doing so and can sometimes mean the success or failure of your business.
One of the more simple programs ion the market today is Microsoft Money. This program is pre-installed on most PC's manufactured today and its simplistic interface is the main reason it is such a hit for individuals and small businesses that choose to use this accounting program. As far as small businesses are concerned Microsoft Money can might be able to meet your accounting needs but be aware that the program is geared towards personal finance. However Microsoft does offers a version that is catered to the small business called Microsoft Money Small business 2006.
There is also the accounting program Quick Books which is geared towards the small to medium sized business and is much more advanced then Microsoft money. This program is designed by a company called Intuit, that offers free support when you purchase their product which may come in handy as not all accounting programs offer the level of support you will receive from Intuit. Quick Books allows you to tailor reports and the interface to suit your companies needs and help streamline your business accounting. It will also set up all your files and prepare them for the year end tax season, this accounting program is defiantly the accounting program of choice for many small business.
With the number of accounting programs out there its not very difficult to choose the program that will best suit your accounting needs If you're a startup operating out of your basement or you are a medium sized business with hundreds of employees worldwide there is an accounting program that will help your business comply with government regulations and accounting policies.
Each business is different in regards to accounting needs. Some businesses choose to outsource most of its accounting duties during tax season while others have accounting programs ranging from simplistic accounting programs to advanced accounting programs. Stricter government regulations over the years have made it mandatory for all businesses to properly file and abide to accounting regulations in place.. It is imperative that a businesses accounting program is up to par in doing so and can sometimes mean the success or failure of your business.
One of the more simple programs ion the market today is Microsoft Money. This program is pre-installed on most PC's manufactured today and its simplistic interface is the main reason it is such a hit for individuals and small businesses that choose to use this accounting program. As far as small businesses are concerned Microsoft Money can might be able to meet your accounting needs but be aware that the program is geared towards personal finance. However Microsoft does offers a version that is catered to the small business called Microsoft Money Small business 2006.
There is also the accounting program Quick Books which is geared towards the small to medium sized business and is much more advanced then Microsoft money. This program is designed by a company called Intuit, that offers free support when you purchase their product which may come in handy as not all accounting programs offer the level of support you will receive from Intuit. Quick Books allows you to tailor reports and the interface to suit your companies needs and help streamline your business accounting. It will also set up all your files and prepare them for the year end tax season, this accounting program is defiantly the accounting program of choice for many small business.
With the number of accounting programs out there its not very difficult to choose the program that will best suit your accounting needs If you're a startup operating out of your basement or you are a medium sized business with hundreds of employees worldwide there is an accounting program that will help your business comply with government regulations and accounting policies.
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