Small Business Defined:
A small business refers to any type of business model that is privately owned and operated. To be considered a small business, the particular model must fall into the established federal size limitations that define what a small business is. According to the Small Business Administration—the predominant organization that facilitates loans and provides assistance to small business owners—defines a small business as any privately owned company thatemploys fewer than 500 people.
That being said, other forms of legislation will further elucidate such qualifications based on the particular industry that the business operates in. For instance, non-manufacturing small businesses are those companies who employ fewer than 15 employees. In addition to size of the employee base, a small business may be classified based on its assets, the gross volume of sales or the amount of production.
Functionality of Small Business Accounting Software:
Regardless of the size or the industry where the small businesses operates in, all small business owners must purchase software to streamline the company’s functions and obtain financing to satisfy costs and pay for expenditures. Due to the privately owned status, the owner of the small business takes responsibility, both in regards to the establishment of the product or service and fulfilling all expenditures associated with the business.
As a result of these responsibilities, these companies must purchase various applications and computer programs to facilitate with their purchases, expenditures and organizational needs. One of the fundamental applications is a form of small business accounting software.
Small business accounting software is computer programs that help streamline the basic financial roles and requirements of a small business. For instance, small business accounting software will streamline payroll requirements, balancing a budget, filing taxes and organizing all expenditures that are necessary for a small business.
How to choose a Small Business Accounting Software Application:
The specific type of small business accounting software is dependent on the formation of the business, the size of the business and the industry in which the business is located. Upon evaluating these basic pieces of information you must choose the specific small business accounting software that best fits into the company’s budget; the small business accounting software program that is the cheapest while providing the mandated needs is the ideal application. For example, those companies with less-complicated accounting needs should find a free or off-the-shelf small business accounting software application.
If your company is established as a sole proprietor with a specifically focused business model, with no payroll process and little-to-no inventory you may be able to handle the firm’s accounting needs with a free business accounting application. These free small business accounting software applications can be downloaded online and can be used to keep track of your company’s income and expenses.
If your company is a larger business; however, you will need small business accounting software that has more features included; for example, you may need to purchase a small business accounting software application that has the ability to keep track of a large inventory of products, handle payroll payments for employees or independent contracts, track sales and satisfy tax requirements.