In private practice, it can be common to think that your accounting system is just to record your activity to ensure an accurate computation of taxes – but it contains a wealth of useful information to help run your business. Ian Tongue looks at accounting systems and how to get the most from them.
What is an accounting system?
Systems can vary between businesses, but the key thing is that it records the financial activity of the business and that the transactions are complete and accurate.
From this source, your accountant can extract the information they require to prepare year-end accounts and tax. But there is plenty of useful information available real time to ensure you run your business as efficiently and profitably as possible.
Systems can range from simple spreadsheets to sophisticated computerised accounting packages. Often, consultants use a clinical management software package to run their business and many of those have accounting functions built in, although these would not be of the same functionality as a full-blown accounting software package.
Usually a full accounting package is not required and the necessary information will be available from the spreadsheets or clinical management system.