This past weekend, I set out to conquer Microsoft Small Business Accounting. 
Although I did accomplish my goal, I can't say that there weren't moments when I considered just using the shoebox method of accounting. You know, just throw everything in a shoebox and let my accountant sort it out once per quarter or so.
It may have made things easier if I didn't have such a hard time wrapping my mind around what is a debit and what is a credit. Maybe it's due to all of my years in customer service, ("I'm sorry that you were unhappy Mr. Customer, I'll be happy to issue a $20 credit for your inconvenience"), but I had it in my head that a credit is a good thing, that it adds to your bottom line. No, no, no!!! I had to unlearn everything I thought I knew and start over from the beginning.
I also have to admit that the only reason I chose this particular program was price. The three most popular programs all seemed fairly similar, on the outside at least, to a non-accountant. My cost for Small Business Accounting was $49.99, after a generous "instant saving" of $100 and a rebate of $30. The only cheaper program was Free Accounting, which is free unless you want to register for updates, and then there is a nominal fee. But, it doesn't come with support, and I am an accounting novice (see above), so I went with Microsoft, who also threw one year of free phone support into the package. How could I refuse?
I sat down on Saturday morning, armed with the software, the instruction book, and another book that I purchased, Step by Step, by Curtis Frye and John Pierce, which by the way, is also published by Microsoft. The two books did overlap in a lot of places, but I still found it useful to have both, as there were times when I couldn't find the answer in one book but did find it in the other.
There were also times when neither book held the answer, so in addition, I made use of Microsoft's support website. It was easy to navigate, and the search function was intelligent enough that each time I asked a question, one of the choices presented was the correct answer.
The initial setup was easy, as the program uses a wizard. I just answered a few questions about my company, and the wizard set up the accounts I would need. If you've already been using another program, Small Business Accounting can import data from QuickBooks.
The program also comes with two sample companies full of data that you can practice with. In addition to those, before I started using it in earnest, I created my own fake company to see how adding entries would affect different accounts. I would suggest this to anyone not familiar with accounting programs. It saved me from having to correct errors and show adjustment entries in my real company books.
Entering my data seemed to go smoothly, until I tried to do two things.
The first thing I had trouble with was paying a credit card bill. That was my own fault, because I used the wrong instructions supplied from the website. I paid it as if I were paying a vendor bill, which of course did not reduce my credit card balance, and in addition, caused a double entry in my checkbook. It took me several hours to figure out what I had done wrong and correct it.
The second problem I had was entering inventory. I'm not sure why this isn't explained anywhere, maybe it's just one of those things that I should have known. Inventory is not entered on it's own. It is entered when you make the purchase, and is transferred automatically from the purchase order or credit card bill to the inventory account.
Added edit here to correct above paragraph, so that you don't make the same mistake I did.
To enter inventory:
- Create a purchase order
- When the items are 'received', they will increase the inventory
- Create a vendor bill
- Pay the vendor bill (by check or credit card)
I'm sure I will hit other hurdles as I continue to use the program, but so far I'd have to give it a thumbs-up. Considering my lack of accounting skills, it wasn't that hard learning to use it, and the price was definitely right. As I become more proficient, there are other add-on services that I can buy if I wish.
Next project? Creating a home office network.
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