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Rita Alvy-Teeter came into work one bright spring day last year to find a third of the revenue pulled out from under her Irvine, California, design firm.

The loss of just one large client hit the paychecks of the president and her partners immediately, and put Drive Industries Design Group, which projects $800,000 in 2005 sales, in survival mode. Purchases got postponed, paper clips got counted, and some of the seven-person boutique's outside contractors didn't get contracts. Summer 2004 was spent rustling up approximately 30 new clients to replace that one big revenue-generator. Alvy-Teeter herself had to spend more time CEO-ing than sketching.

The good news: She and board member Tammy Ross-Stern, a CPA with Beckman Kirkland & Whitney in Westlake Village, California, had a diversification plan in hand. Being a regular user of QuickBooks accounting software, Alvy-Teeter had a down-to-the-penny understanding of her firm's financial position--income, bills, cash on hand, jobs in the pipeline and discretionary expenses (see "Book 'Em, Dano,"). "We wouldn't have survived without daily monitoring of cash flow," says Alvy-Teeter, 48.

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Like they say: What doesn't kill you makes you stronger. This year, Drive replaced those 30 stopgap clients with 10 higher-revenue, higher-profit clients appropriately diversified.

Good Times and Bad

Bad things are going to happen to nice businesses. But growing numbers of entrepreneurs are using PC-based accounting to stay close enough to their books to survive inevitable downturns-and make the most of good times.

John Garrett, 43, can't imagine trying to steer Triad Distributing Northwest to profit without daily reports from Peachtree Accounting. The seven-person building product distributor in Garden City, Idaho, projects $2.2 million in 2005 sales and regularly inventories more than 7,000 stock-keeping units with varying gross margins, sales cycles and restocking schedules. Many are used in combination, so the founder and co-president has to carefully orchestrate the arrival of subassemblies to keep Triad's average profit margin from slipping.

Yet one large customer demands prices and features that leave Triad's gross margins below acceptable levels. But doing business with that company still makes sense because Peachtree shows its inventory turning far faster than others, explains Garrett, so Triad gets a return on the same dollar invested more times a year than with other lines.

Another familiar challenge: passing sudden cost increases on to customers--including not-so-obvious costs. It isn't the expected fluctuations in wholesale coffee prices that hurt Atlanta-based bean roaster Partners Coffee. Even though the $3.5 million-a-year wholesaler's selling prices are locked in by contract, founder and CEO Jim Gilson, 50, can minimize those impacts by hedging coffee futures on the Chicago Board of Trade. But sudden jumps in other components of his "cost of goods sold" line are a different story.

"When crude oil goes to $55 a barrel, I can take a 12 percent to 18 percent hit on my corrugated [boxes] and plastic packaging," says the founder of the 15-person firm. "I have no way to pass those costs on while contracts are in place. They come out of my margin."

But worse than knowing how much money you're losing is not knowing. Just before negotiating his next sales contract, Gilson pulls his most current costs out of Peachtree. Similarly, QuickBooks alerts Frank Toledano, 33, president of Tiger Imports Group of Highpoint, North Carolina, when it's time to discontinue one of his 100 different styles of high--end Italian leathers. The minimum hide purchase is more than $10,000, so the $5 million-a-year importer can't afford to keep lines that turn too slowly.

Look Ma, No Bookkeeping

You don't have to waste time entering debits and credits to use an accounting program. CPAs advise having in-house clerical workers or a part-time bookkeeping service enter data. You don't have to become a CPA, either. It's cheaper to let your accountant set up your books and consult on complex accounting matters.

Maintain internal control of your own books, and tap them for quick answers, says Diane C. O. Gilson, founder of Info Plus Accounting. Her Ann Arbor, Michigan, firm provides all the traditional CPA services. But Gilson prefers to set up clients on QuickBooks for routine tasks. Her website (www.infoplusacct.com) also includes a variety of QuickBooks add-ons to help with more sophisticated types of business analysis."You don't have to be a large company to have a complex accounting challenge," explains Gilson.

Are you making full use of your accounting and business data? Your books are the one source no competitor can share--information far more relevant to your company's situation than anything else. Salted away in your accounting records are financial alerts, ways to trim costs and tips on where profit is hiding.

You'll generate the data anyway, so why not turn it into profits?

Book 'Em, Dano

These time-tested solutions deliver 99.9 percent of the accounting functions any growing business needs. Each has different strengths, though.

• QuickBooks has a very approachable interface, good reporting and a version for every small-business situation. Intuit's website adds data backup, payroll and other online services, as well as third-party software for accounting-related functions like timekeeping.

• Peachtree matches Intuit product for product. It's not as strong online, but it has more sophisticated inventory handling and reporting for in-depth financial analyses.

• NetSuite offers bred-in-the-bone e-commerce, enterprise resource management and similar services integrated with accounting for e-tailers and larger entrepreneurial businesses in a subscription service.

Mike Hogan isEntrepreneur's technology editor.