Should I switch bookkeeping to computer?

Q. Our retail store does annual business in the $200,000 range, and we do our books by the ledger system. The thought of computerizing is intimidating, but other retailers tell me I should have my business program and point-of-sale information on computer. Do you have any recommendations for a small business as to what kinds of programs are available to perform these tasks? Will one piece of software do everything, or would we need several programs?

A. In the "good old days," cash registers told us our sales and we eyeballed inventory to analyze what was selling. Unfortunately, those methods are no match for the demands of today's hyper-competitive environment. A good (and not necessarily expensive) computer system can arm you with a wide range of information to increase sales, reduce costs and boost profits. It can tell you who your customers are and what they buy, it can track your inventory, schedule your employees, do your accounting and aid in profit analysis.

In choosing a system, you first need to decide on the software package that's right for your business. Then you choose the hardware -- the actual computer system -- that will make the software operate the most efficiently. In most cases, software providers will help you select the necessary hardware. However, the assortment of software packages on the market can be overwhelming.

There are two basic approaches to choosing a software package. One is to have it customized to your business. The other is to find an existing package that provides data that can be adapted by your business. Given your volume, you can probably find an existing package to get you started on the information technology path. Given the diversity of the retail industry, however, we are not aware of a single best program that meets most retailers' needs. That means you'll need to talk with retailers who have stores similar to yours, your CPA, advertisers in the Michigan Retailer, and your local computer reseller (especially one who provides a full range of customer-support services).

Again, many CPA offices are knowledgeable about business software and local vendors. Just be sure you wind up with a vendor who speaks your language and understands the needs of your retail business. Also ask if your CPA has linkage software, which can connect your store's computer system to computers in the CPA's office. This can be very helpful for small businesses.