Thursday, April 15, 2010

Top Tools We Rely on for Our Wholesale, Retail, and E-commerce Businesses (cont.)

To continue with my list of top resources...

2. Quickbooks. Now you know I'm a dweeb. If Volusion is the airplane that your customers ride, then Quickbooks is the pilot's navigation panel -- or it's kind of close. Many small business owners (I would guess over 98%) are already comfortably familiar with Quickbooks. If nothing else, an accountant or friend has set the system up so the business owners can make a few routine bookkeeping entries.

I guess the reason I love Quickbooks so much is most third party vendors integrate with Quickbooks. This means less time doing data entry. With either our wholesale or retail businesses, we transfer data automatically into Quickbooks. Whether it's a journal entry balancing sales, cogs, inventory, tax, and credit card data, or itemized transactions, it's all a blessing to look at when the mundane part of data entry has been resolved.

So what do we really use QuickBooks for?  Yes, of course tracking money flowing in and out of our business. But the real plus is basically two areas:
- business decision support
- tax preparation

Business decision support. Where have we been, how are we doing, where are we going? Accurate data to support critical business decisions. Late last year I gave a workshop on dashboards and scorecards as it applies to the specialty beverage industry (in this case - coffee, cafes, delis). It's not enough to have the information, you need to find a way to predetermine a core set of regular parameters (eg cash flow, sales year over year) and hypothetical parameters (eg effectiveness of marketing campaigns, # employees per shift on sales). These reports or "dashboards" automatically populate once you open your report application.

Tax preparation. It's April 13. Can I say it now? I hate taxes. It's tedious and time consuming. Yes, we can have an accountant prepare everything, but Quickbooks is a core starting point. It's like a filing cabinet. The more things are in order throughout the year, the easier it will be to find things - no matter what time of year. People forget how Quickbooks makes everything easier come tax time. For us in the retail area, we actually use our POS more for sales tax calculations, but overall Quickbooks is a good base.

I'm sure all of you new business owners will end up with QuickBooks eventually. Within the first year, you'll think you know this program and a new situation will arise for which you won't know how to address in Quickbooks. My main recommendation is to find a pool of at least 3 people you can ask questions of when you get stuck. Even searching the internet for answers might take longer than just calling a few friends. Besides, there must be a gazillion users out there for Quickbooks.

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