Monday, January 10, 2011

Keeping the books!

I know these blog entries don't seem to have anything to do with sewing and design, but as someone who is going through the motions of developing a fashion design business, I think someone may find this useful, as I'm not the only person interested in doing fashion as a business who began with very little knowledge of how to do this! After a quiet time over Christmas as I spent time more with my family than with the project, I started the new year flat on my back with a bad cold. It's only in the last two days that I've started to feel better.

I've started to systematically organize my research effort. Hence one of the tasks I will need to do soon will be to identify my most likely sources of fabric. I've still not made all my decisions in this regard, for example, off-shore versus fabrics produced in Canada or North America - right now, I'm trying to cost it all out and find good quality fabrics at prices that make sense. As I started to make lists of potential fabric sources, I realized I really needed to organize these into a database - my company will need to manage its sources rather more systematically than haphazardly. After some time looking into database software, I decided that what I really needed was to start looking into financial management software, since the fabric sourcing is intimately tied to many of the financial issues, and to develop the sourcing files simply as contact lists, using AddressBook on my Mac.

As a result, I spent time over the weekend reading up on reviews of accounting software for small businesses with a particular focus on MacOS-compatible software. Despite some discussion about a possible Peachtree version for Mac, I was not able to obtain any direct demo for this - instead I downloaded a demo version of AccountEdge (formerly MYOB).

My efforts to understand this software were hampered by my lack of experience with basic accounting principles. But as I struggled with the software, I kept telling myself - "hey, you're a senior academic, this isn't rocket science, tons of people work with this all the time, you just need to 'catch the trick' and you'll be fine". And when I stepped back to read some basic texts about accounting 101, I did finally 'get it', and from that point on, I've been able to use the software with only a few teething problems. The "trick", no doubt obvious to all and sundry who are familiar with accounting, is that you have to double up entries on the Debit side with entries on the Credit side. To some extent, the software does this for you, but until I understood the principle, I was producing nonsense.

Other teething issues were the realization that I needed to turn on "multiple currencies", since many internet purchases are in US$ (or even Euros) and not just in Canadian $, and then I had to figure out how to modify the default exchange rates to something like where they are now. I'm still not at home with invoicing, but I do feel that I am beginning to get a handle on how to use the accounting software to stay abreast of the financial management of my company. At this point, I'm not managing much more than some of the early financial outlays, but even for these I now have a cumulative figure of how much I've paid out to deal with a range of "start-up" issues as well as some ability to understand how these costs distribute across different categories of purchases.

I'm still waiting for the provincial registration papers to come back with tax numbers assigned, while in the mean time moving forward with finalizing the prototypes so that when the start-up money clears, I'll be set to get the production machinery in motion!

1 comment:

  1. I use MYOB too, for my new, small business. And I've had the same struggles - with a Ph.D. I figured I should be able to handle this no problem, but it took a while to work out certain things - for example, for some of the expenses, I'm still not 100% clear what categories to use for the debiting and the crediting... I'm also still struggling with getting it to import sales correctly from the history files that I can export from PayPal... I've almost got it, but it seems like there are still bits I need to tweak by hand. On the plus side, I do appreciate the reports it can spit out automatically to help with taxes! :)
    Good luck!