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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.

  

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