Below is a four-step guide on how to set up an accounting system for your business, specifically for business managers. This guide focuses on strategic management issues. For detailed implementation instructions, please refer to the full article.
To establish an effective accounting system, you must design an operational plan, select appropriate accounting software, and train system users.
You can modify the system with pre-planned additions if your system is set up to meet your specific business needs. Your accounting system should provide you with information about the amount and source of income your business earns, as well as where and how much it is spent.
Step 1: Develop an operational plan that is appropriate for the size, products, and services of your company.
First, you must create an operational plan that is appropriate for the size, products, and services of your company. Based on this plan, then concretize it into the necessary accounting data.
This plan requires clarity of detail by consulting with those responsible for bringing in revenue and those responsible for approving company expenditures. It should define the purpose, approval limits for income and expenses, and categories of income and expenses requiring approval from appropriate management levels within the business's operational structure.
For example, you need to determine whether income is categorized by source, such as Company X and Company Y, by type of service or product, or by a specific service or product.
Step 2: Establish work process procedures
Establish work procedures and rules defining who can use the system and for what purposes.
In addition to the implementation process, you need to establish a regular monitoring process to prevent problems and ensure data integrity.
Step 3: Choose the appropriate accounting software.
Choose accounting software after trying different programs that suit your company's requirements; it needs to be easy to understand and use.
Some companies may require a consultant to design a system from scratch or modify an existing one. Most small businesses will be able to find an existing program from the many available on the market.
Step 4: Recruit, assign, and train personnel to participate in the accounting system.
- Identify who is involved in the accounting system, and the tasks, roles, and rights of those involved.
- Define management permissions such as: who can enter data, who can review it, and who can create reports.
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