Does your accounting system share your priorities?

If you started a small business in the U.S. within the past 15 years, chances are good that your first accounting system was QuickBooks. Great choice for a startup: low cost, versatile, intuitive, and every small-biz accountant and bookkeeper knows how to use it.

As your business matures, your priorities change. QuickBooks’ priorities might no longer be the right ones.

QuickBooks was designed from the beginning to allow non-accountants to capture income and expenses in checkbook-like entries. The product has expanded to meet the needs of all kinds of small businesses, and now has ways to manage inventory, bills of materials, timekeeping and job costing. But its emphasis remains on basic transactional bookkeeping; doing these other functions well often requires workarounds and customized reporting tools.

Why not find an accounting system that shares your priorities?

If your business is project-driven, you need to understand how each project contributes to your bottom line. You need to plan by project and hold people accountable for projects. You need a true project accounting solution that also does financials, instead of a basic bookkeeping system that also does some project accounting.

What should you expect from a good project accounting system, over and above standard financial accounting?

  • Project budgets and control: Record a baseline budget of hours and dollars for each project – for the overall project, or for line items or tasks within the project – and then control who can charge time and costs to each project, by task and date.
  • Resource planning: Slot your available staff into the projects you expect to be working on for the next year to more accurately predict when you will run out of work or run out of people.
  • Indirect costs: Understand how much a dollar of labor or materials sold to a client really costs you in fringe benefits, facility and IT expenses, administration and management, and see the true profitability of each project.
  • Reporting: Comprehensive, real-time reporting on budget vs. actuals, burn rates, profitability, utilization and other metrics for individual projects and groups of projects, in standardized, company-wide formats.

Much of the software in this space that will completely replace QuickBooks is overkill for a small business – and far too expensive. The best one we’ve found is Unanet. It does everything we need for managing our projects, staying compliant (even for federal cost-plus contracts), and keeping the books, with fantastic reporting and some nice extras to help with collaboration.

We recently made the switch from QuickBooks to Unanet, and we’re starting to reap the benefits. If you’d like to learn more, visit our Unanet page, or send me an email at info@tagence.com. Happy to share our experience and help you decide whether it’s time to make a change!