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Helpful Tips On How To Avoid Bad Accounting

By Brown Ezilon.com Articles Published 10/16/2010 | Accounting
Before you launch into the process of accounting, it is important you understand the basics in order to get all your accounting work done properly, right from the start.

The first step to take is to understand where you are heading and what you are about to tackle. If you get your accounting work done right, then it should help you gauge the success or the problems that are present in your firm. With some good work in the accounting department you should, by the end of the year with the help of your complete income statement have clear where your finances are heading. This should help you revise and correct any bad accounting process, for accounting is a diagnosis of all that is right or wrong within your business.


All good accounting work should start with a pro forma income statement at the beginning of the year, which paves the way to good money making. It is fundamental you understand the ration of expenses and sales that will help you achieve the profits you are aiming for.

It is important you fix yourself an objective sum wise, that is you need to obtain a certain gross sum to calculate your profit from it and not merely aim at what income you will have on one particular day of the week.


Try and have the costs clear in your head, this means all costs, including issues such as damages, freight costs, theft and obsolescence. The next step will be calculating the costs of goods that you sell before you actually start selling products or services. Remember that the selling price is not the average selling price, you will have to take factors such as discounts amongst others, as these will increase your figure of cost of goods sold (COGS).

If you are still not sure if you feel up to undertaking the accounting for your own company, you could always opt for hiring someone, though it is essential you hire the right person, for it is your money at stake.

Before you make a choice amongst the various applicants, keep one thing in mind. When an applicant seems interesting make sure you do some background research and call the references they have given you. Ask them why the person no longer works for them and by their answers you will be able to know where you stand with the candidate.

Your main goal is to reach all the essential standards in those areas such as customer service, quality control and the company's image. It is very easy to run into problems such as pricing errors, customer service failures or bad quality problems, therefore it is essential you fix these before the damage is unrepairable.

The best way to deal with problems is by being able to identify them and pinpoint the areas that are more likely to cause hitches. If you recognize them and deal with them straight away, each month you will find it easier to keep up with the ups and downs and get your accounting. The more problem areas you can anticipate the easier all your accounting work will be and this will help you avoid bad management within your business.