| Best regards | | | | capitalise on asuccessful program. Without |
| Terry Cartwright | | | | measuring and analysing salesperformance |
| Using Accounting Software To Make Your | | | | management action becomes a guess game |
| Business More Profitable | | | | basedupon intuition rather than hard financial facts. |
| Producing financial accounts may well be an | | | | Accounting software produces a gross profit |
| administrativeheadache for a small business and | | | | margin thebusiness is earning on its products. A |
| many self employedbusinesses put off this | | | | small business whenpresented with the profit |
| essential business and reduce it toan annual event. | | | | percentages can make decisions toincrease sales |
| There are major benefits that smallbusiness can | | | | prices where possible to increase the profitor |
| derive from operating the financial system asan | | | | reduce cost of sales as appropriate. The gross |
| important part of the business management. | | | | profitmargin is vital to the business finances and |
| Big business invests millions in sophisticated | | | | analysing themargin to identify areas where it can |
| accountingsoftware and financial control systems | | | | be increased cansignificantly improve profit |
| because financialmanagement is seen as a key to | | | | performance. |
| financial success. Manysmall business organisations | | | | A monthly profit and loss account would show |
| ignores these benefits relyinginstead on personal | | | | the level ofexpenditure in running the business. |
| knowledge and in some cases not eventhat. | | | | Reviewing the monthlytrends produced by the |
| Why would a large business that is focused | | | | accounting software will often showsome |
| entirely on thebottom line and growing that | | | | categories of expenses going up and some going |
| bottom line invest inbookkeepers, accounts clerks, | | | | down. |
| accountants, creditcontrollers, cost controllers, | | | | Critical review of costs can maintain financial |
| financial directors andaccounting software? The | | | | control andimprove the financial performance. |
| answer is simple. Detailed strongdisciplined financial | | | | A critical financial feature of business is the level |
| control is essential to protectingthe financial health | | | | ofgross profit margin in both percentage terms |
| of the business and providing thefinancial | | | | and volumecompared with the level of fixed |
| framework to produce higher profit growth | | | | expenses. By usingaccounting software to |
| yearafter year. | | | | produce a monthly profit and lossaccount the |
| All business functions are important for business | | | | business management can immediately see |
| success. | | | | andunderstand if that gross profit is sufficient. |
| Sales and marketing provide the growth | | | | Actionshould follow. |
| opportunities andproduction and operating activities | | | | That is the benefit of accounting software, the |
| produce the goods tosupply that demand but the | | | | productionof actual financial figures that indicate |
| finance function delivers theframework and | | | | where and howmuch action needs to be taken to |
| analysis to grow the bottom line. | | | | improve the net profitearned. That action may |
| Regardless of whether a small business maintains | | | | indicate a need to improve salesvolume, increase |
| a manualsystem of bookkeeping to record | | | | the gross margin through higher salesprices or |
| financial transactions oruses an accounting | | | | lower direct costs or a reduction in overhead |
| software package it is important thatregular | | | | andbusiness running costs. |
| monthly accounts are prepared. And having | | | | Financial questions can be asked based upon the |
| prepareda set of financial accounts those | | | | historicalevidence of the financial figures produced |
| accounting statementsshould be reviewed to | | | | in earliermonths compared with the current |
| grow the business. | | | | position. Such questionsmay identify sales |
| By producing monthly accounts that show the | | | | opportunities that are not being fullyexploited, |
| sales turnoverpreferably analysed by product | | | | areas where gross profit margins can be |
| type or source of sales theeffectiveness of the | | | | improvedand cost control over excess |
| sales campaign is measured in realmoney. Such | | | | expenditure. With thefinancial control and analysis |
| financial information is required to determinewhere | | | | that accounting software canprovide a business |
| future sales and marketing efforts are required | | | | financial performance can be improvedand the |
| toimprove or discontinue a failing program or | | | | bottom line increased. |