A: Translating theory into practice shouldn't be too difficult once you get started. The procedure for tracking your company's financial status is basically the same no matter how large or small a company you're running, says Philip Wolitzer, a professor emeritus at Long Island University who specializes in accounting and taxation. "You have the same accounts -- assets, liabilities, capital, income, and expenses -- whether you're a tiny business or a huge business," he says. "All a small business has to do is keep track of its assets, the liabilities it owes, the income coming in, and the expenses it's paying out."
Specially adapted software for small-business use, like QuickBooks and Peachtree offerings, make financial record-keeping easier and include information aimed at beginners. Bill Sturgeon, a CPA based in El Cajon, Calif., recommends his clients use the library included with the QuickBooks CD as a resource. "There are informative articles there regarding most business categories and issues and an extensive glossary of terms," he says. "There are two aspects of learning small-business accounting: the theoretical part, which you get in college, and the mechanical part, which you get on the job. Quickbooks blends both at an entry level and covers most of the basics."
If you want to investigate some of the additional small-business accounting software that's available, you might check with other consultants, professional consulting organizations, and service-based business groups to see what their members are using.
BASIC AND DELUXE. If it's a book you want, Megan Marcoux, a Sacramento-based CPA, recommends Accounting and Finance for Your Small Business, by E. James Burton and Steven M. Bragg (published by John Wiley & Sons, it is listed at $24.46 on Amazon.com). "The book touches on all the important issues such as budgeting, accounting, planning for tax liabilities, etc.," advises Marcoux. "If you have a basic understanding of accounting, this book will be a good fit. It is not too basic, but it's also not a textbook."
Paul Kirschner, a Southern California management consultant, values the two-volume Small Business Sourcebook, edited by Yolanda A. Johnson. The hardcover resource, published by Gale, can be ordered through the publisher's online catalog for $350. If you are reluctant to part with that sort of money, the set should be available through local libraries with business reference sections. "These are hardcover books with excellent coverage of many different business aspects in a lot of detail," Kirschner says. He also suggests you ask your chamber of commerce for book recommendations.
Even with an academic background, excellent software, and good research, experts say you should hire an accountant to work with your business, particularly at the start. "You're usually far better off paying attention to the business and letting the accountant worry about the accounting. And it will probably be cheaper in the long run, because you'll be focusing on bringing in clients and making money and the accountant will keep you well-informed about where your business is, financially speaking," says Wolitzer. Have a question about running your business? Ask our small-business experts. Send us an e-mail at email@example.com, or write to Smart Answers, BW Online, 46th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.