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Thinking of expanding our small business – Advice required please


geek84

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Hi folks

A friend and myself run a (very) small business and most of the accounting records (sales & purchases) are done via spread sheets and manual records are kept. We are thinking of expanding the business and would be most grateful if any of you kind folks out there could offer us with some advice on the following -

  1. Ideally, what packages would you recommend for the efficient running of the accounts functions? We have thought of only Sage and Microsoft Office.

  2. We are also thinking of eventually employing some more staff to do the accounts work and eventually would like most of the processes within the accounts dept to be documented, by creating some type of manual, particularly regarding the level of access/responsibility etc of the accounts staff. Could someone suggest how this can be done? Can it be done internally or would it need a professionally qualified person to create this manual? How much would it cost to do it?

  3. Back-up copies would need to be kept of each sales/purchase transaction within the dept at a separate location in case of fire/theft. Can someone suggest what type of storage medium could be used for this, together with an indication of costs?

  4. If someone pays for goods by card over the phone, we would ideally want the card holder to be present at the time of the transaction. What checks could be made in order to establish this?

  5. Finally, we only have one supplier at the moment. Ideally, what is the most efficient process/procedure that needs to be followed in order to get more than one supplier on our books?

I'm sorry that I seemed to have asked too many questions, but would be most grateful if you could provide any type of help.

Thanks in advance for you responses.

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wee eddie

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Talk to your Accountant.

Firstly, because they will have to be able to work with whatever software you chose to use. If you chose Software that they are not familiar with, they will do their best, but your Fees will rise.

Secondly, consider outsourcing some, or even all, of the Accounting Functions. For example, the Wages/Salary Function needs an expert to make the best use and to navigate the Legal System but it is unlikely that you will generate sufficient work to make employing an expert, feasible. Your Accountant may have it's own Department that does this for others. My Accountants were a small, 3 Partner, Company and yet they were able to give me access to a team of 4 experienced personnel and all for about £65 per Staff Member per year. This included everything including the production of P45s, P60s, NI and all Tax Matters.

That was one of the best moves I made.

You can even outsource the day to day Record Keeping, which I'm not so sure about.

However, outsourcing Invoicing can be a very useful way of spreading the load.

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Taff™

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wee eddie has given sound advice on 1 and 2.

  1. If all transactions are initially recorded electronically on a computer or till you will probably only need a couple of external hard drives to download them to. Every evening attach one to the computer and backup the data. If necessary leave it running overnight. Remove that external drive and take it off premises replacing it with the second drive. Periodically, do a full backup of the entire system as well. (Daily, weekly or monthly at your discretion.)

If your business is set to expand and there are several computers in use I would strongly recommend setting up a secure network with a server where ALL data is kept. This simplifies the above and should perhaps be your first step. A word of warning though - employees are often tempted to keep "local copies" of company data on their own terminal. An IT professional can make this damn near impossible - consult one!

  1. Card transactions are regularly made with "cardholder not present" and it is a fact of life. Check what your bank recommends for their terminals. They will have strict policies your staff need to follow and they will include recording each transaction thoroughly.

  2. Suppliers - surprised you have only one which suggests you are in a niche market. It would be helpful to know what you buy. First thing I would do is look at the competitors of your current supplier. Google is your friend here. Secondly I would look at a list of your top 20% of selling lines and concentrate on those. (Some law or other states that they will produce 80% of your turnover)

Similarly I would look at your top 20% of highest profit items and identify the products that contribute to it. Work on those too. They may not be the same as the top 20 lines. I would also be pushing those in sales terms anyway. That's another story .......

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Taff™

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OMG the site has renumbered my paragraphs. Sorry about that but I think you'll get the drift.

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Forum Editor

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Taking your questions in order:-

I recommend Sage for your accounts if you are anticipating a reasonable volume of sales. In a network environment it can be used by more than one person, and is a tried and trusted accounting solution for small to medium sized business.

You don't really need a new professional to create an accounting policy for your staff to follow; your existing accountant will be quite capable of doing the job, or you can do it yourself. Your accounting software will make sure that correct procedures are followed, and you can decide on access permissions via the login process.

All decent accounting software has backup facilities built in. At the close of trading each day you should back up the day's business to an external medium and make sure that the data file backups are taken off-site for the night. It's very difficult to give good advice about data backups without some idea of the volumes involved, but in simple terms, a few gigabytes a day can simply be backed up to DVDs and stored in a safe at home. Larger amounts will require more sophisticated solutions.

The important thing is to ensure that whatever backup system you decide on actually works as you expect it to. Any decent backup system will maintain log files, so check them. Look for errors. Make sure the system is backing up the files you expect it to. Run a test by creating a test file and let your system back it up. Delete the file and run a backup restore. Make sure your file is there, and that it looks as you expected. Alter a test file and check that the next backup has time-stamped the alteration. Run a restore and check to see that your update is there.

There's no sure way to ensure that a cardholder is present at the other end of a phone transaction. You will ask for the three digit security code on the back of the card, and you'll ask the purchaser to tell you the address to which the card is registered if you use the banking industry's Address Verification Service (AVS). If you feel at all doubtful you can ask for further information, such as a landline telephone number. Remember that a transaction authorisation from VISA or Mastercard os not a guarantee that you will be paid, so vigilance on the part of anyone who takes phone orders in this way is essential. People who routinely handle CNP transactions develop a sixth sense that warns them when somebody doesn't sound 'right'.

Look at suppliers as you would look at anybody with whom you were about to do business - can they provide you with what you want, when you want it, at the right price? The right price isn't necessarily the lowest,there are other considerations, such as guarantees of quality and supply -it's commonsense really.

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Terry Brown

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For you accounting,I would suggest contacting an acountant and let them do the books on his own system.

I used to work for a small comany who did this and the accountant run the software for 8 different companies, keeping each one seperate from the others (think of it as outsourcing)

This may be better for you as (1) you do not need the time to do your accounts and can concentrate on the business

(2) A good accountant can usually save their costs by knowing ways of saving tax that you would never have thought of.

(3) They can also save you the hassle of dealing with the Taxman every year.

PROBLEM 3

All tranaction made online are normally given a online invoice / email within a short time of the transaction.

These goto to the accountant- Copy for your own records

PROBLEM 4

Online transactions are usually made with the cardholder not present, however you can set up a system where an authorised persion has to enter a password to get access to the system and a secure code before the deal is authorised (you can do this or get a trusted member of the team to do it in your absense.)

PROBLEM 5

The product you sell, do a search with a progam like google to see who else is doing it,and you will normally find people who are willing to suply the product (or components or it).

Lastly

In the event of a major problem keep all records on a secure backup device-( suggest a USB drive.) One for every day or accounting period, reusing after the latest one has been verified as good,these to be stored away from the office.

The usual option is the Gradfather, father, son system.

The first backup becomes the son, on the second bachup the son becomes the father and the new backup becomes the son. on the third backup the system is repeated and the father becomes the grandfather. On the forth one the grandfather 'Dies' and is reused.

Terry

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