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