There are many excellent computer software programs on the market to help small business owners keep good records and generate financial statements and analytical reports. These include Intuit QuickBooks, Microsoft Office Accounting, and Peachtree Accounting. In addition, companies such as Net Suite offer Web-based accounting for a monthly access fee. There are also programs to help you manage your money. You can use them to write checks, balance your bank account, and track your income. Some software creates project quotes and invoices. There is specialized software for particular types of businesses and for nonprofit organizations. It may save you time and money to purchase industry-specific software from the start.

Some software companies offer free products that you can try for a limited time or that are free but do not have as many features as the for-sale versions. This is a great way to try out accounting and other business software before you buy. The costs of these packages have dropped considerably over time, making them a better value for even the smallest companies. For example, if your business provides services, and potential customers expect estimates, they can be generated and tracked by professional-services software. Take the time to find the software best suited to your needs.

Recognizing Categories of Costs

Even if you are using accounting software to record your business transactions, it will be helpful to understand the key categories of accounting data. Brief descriptions follow:

• Variable costs (VC): Any cost that changes based on the number of units produced or sold. Includes cost of goods sold (COGS).
• Fixed costs (FC): Business expenses that must be paid whether or not sales are made.
• Capital equipment: Business equipment that is expected to last a year or more.
• Investment. Start-up capital plus any money you or others have invested in the business, but not loans. This is only for money invested in exchange for part ownership (equity).
• Loans (debt): Any funds you have borrowed to start or operate the business.
• Revenue: Money received from sales.
• Inventory: Anything purchased for resale is inventory. Includes shipping costs from the supplier.
• Other costs: Anything that does not fit into the other expense categories.

The London School of Business and Finance is the one-stop solution to learn more about accounting software and business costs.