P R O F E S S I O N A L C O N T R O L L E R S
How to Profit from Accounting
Accounting is more than just passively tabulating history. It is an active process of influencing management decisions and interpreting their results.
o Good bookkeeping/accounting procedures
o Reduce the probability of expensive errors.
o Increase the probability of making "good" business decisions.
o Reduce the disruption of audits and tax return preparation.
o Increase time for management to focus on the business.
o Improve confidence of bankers/investors.
o Budgeting/forecasting identifies objectives against which to evaluate performance.
o An up-to-date cash balance avoids inadvertent overdrafts.
o Accurate/timely billing improves collection of receivables.
o Careful processing of vendor bills
o Helps to produce a good credit rating.
o Produces "pass-through" billing to customers where possible.
o Takes advantage of vendor cash discounts when available.
o Avoids penalties for late payment.
o Avoids paying for goods/services which were not received.
o Avoids duplicate payments.
o Pays a bill when it is due, but not before.
o Cash flow projection helps to
o Maximize investment revenue.
o Minimize borrowing costs.
o Accurate inventory records
o Reduce unnecessary purchases.
o Discourage pilferage.
o Avoid disruptions of production due to material shortage.
o Reduce the likelihood of storing obsolete merchandise.
o Accurate/timely sales bookkeeping stimulates sales personnel.
o Accurate cost/expense bookkeeping
o Produces more competitive product pricing.
o Encourages personal accountability.
o Discourages extravagant spending.
A business will always pay for good accounting, one way or another.