by Joseph Kiwia

Created on: May 24, 2008   Last Updated: May 29, 2008

Accounting options for small businesses

Small businesses should practice better accounting and book keeping in order for them to know their financial position of the business. They should also be able to know the cash flow of funds in their business operations. Small businesses can hire a part time accountant. This accountant is paid for the hours he works for the business. The small business may also hire a full time accountant. A full time accountant is a permanent employee who is paid a monthly salary by the business. They are reliable and convenient. Sometimes they are a liability for the small business when they give inaccurate accounting statements due to fraud, negligence and incompetence in the profession of accounting.

Small businesses may embrace the information technology by using accounting software's such as quick books, sage, pastel, tally and peach tree. They are easy to use, reliable and give accurate information when the data is entered correctly. They also store data safely for a long time and data is easily retrieved using them. However, they require skilled staff to operate with them, who may demand higher salaries thus, increasing costs of running the small business. They are also expensive to purchase and install them in the small businesses. When data is entered wrongly, it may give the wrong impression of the small businesses' financial position and thus avert its efforts of lowering costs to realize profits.
Small businesses may use the internet services such as the internet libraries, to get information on how to keep good accounting records. They may also get online accounting consultancy services from consultants and auditors who may be many miles away. This is because it may prevent fraud by employees of the business and enables the business to run within the international standards of accounting. The recruitment of freelancers is also crucial for the smooth operations and the accounting practices of the small businesses. Freelancers work on a specified work load and are independent and not permanent employees of the business. They may be auditors or qualified accountants and are only recalled or contacted when their services are needed. The cost of operating the business is minimized because they only work occasionally when they are awarded projects to complete for the business. They may provide wrong information if they are not qualified in the accounting profession.
The use of multi-tasked employees is also effective accounting option

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