Small businesses face many challenges and one of them is to set-up proper accounting information systems. Your financial accounting information system should be designed to provide accurate and timely information to be used for activity monitoring and investment decisions.
Management accounting information system consists of the following activities:
The process begins with bookkeeping which involves the responsibility of data processing and preparation of profit & loss statements, balance sheets and cash flow statements. A firm’s performance can be analysed using key performance indicators such as:
- Gross Profit Margin (Gross Profit/Sales)
- Net Profit Margin (Net Income/ Sales)
Accounting reports provide feedback by comparing budget versus actual figures and can be used by a business entity’s management for planning and decision making:
- Cost management related to certain products or services
- Performance analysis such as: profitability, liquidity, cash position
If the accounts are correctly prepared it makes it easier to prepare the entity’s year end financial statements and tax return.
Contact us today to discuss your financial accounting needs. Phone 1300 508 631.