The core aim of a business is to survive and to make a profit in its life time. And give the Manufacture or service the reputation to live its business life.
Business use different ways to use accounting to record transactions, Monitor and control accounting records and take appropriate actions, make management decisions to plan for the future and monitor and control those plans and finally measure financial performance (gross and net profits, and value owed to and by the business.
Businesses record transaction to sell what the business has spent by this I mean if an employee was asked to go and get more pens and paper from the local store as the next delivery time is in a few days and they are low on pens and paper now. So the employee would go down to the nearest store and buy the items that have been asked to be bought by the head of department. The employee would have to buy this out of their own money but the company will pay the employee back from what they have bought, the company would also want the receipt of the item purchased so that they can keep track of what they are spending on and where the money is going. So they will have records of any transactions that have been used and noted down.
Sales of Invoice
Sales invoice are used for receipt that has a connection between the buyer and the seller. It is a document that shows the date of purchase and name of buyer also includes what the item is and total amount of what item has been bought for. Below is a computer display of a sales invoice
A statement shows the cash flow of the business including the expenses of the company and the income of the business. This is recorded onto a statement that is then stored and kept safe in a company showing the financial flow of the business. This can also this can be shown over the last couple of year whether the businesses is improving over the year. For example with the business below
Purchase orders are receipts that are given to the company when a client orders an item or service form a company. Then the company records this into private documents explain when it was ordered, date and name of customers as well as price.
This is a receipt that is given to the customer telling them that they have succeeded in ordering the product or service that they wanted.
Monitor and Control accounting records and take appropriate actions.
In a business you will need to monitor your staff to find out how well they are working on together. Which is a main aspect of having a successful business as people that get along with each other are more likely to help each other out if one of the employees is struggling with a task being given or some sort of report to do.
When it comes to accounting you will need to have some one that is qualified in that part of accounting as a slight miss calculation could cost the company money from some ones miss calculation. So the business will have to splash out on some one that is either in the business that understands accounting or has a qualification in that given area of business.
Monitoring and control accounting records are important as they will show the business where their money is going and whether they are making any miss judgements in putting their money into areas which are not making profit for the company. A company then can see that their marketing area of the business has a low amount of progress that needs to change. So what the owners may decide to do is take appropriate actions towards this marketing team and invest in their area to boost the out come from that given area.
Also the business uses these kinds of ways of keeping track of sales in store and expenditures:
A Sales Invoice
A Purchase Order
A Purchase Invoice
Make Management Decisions to plan for the future and monitor and control those plans
Businesses naturally evolve from both making money and reputation or even word of mouth through this a business can either expand their business empire or they could even franchise the company.
These are some of the things that they could do to plan for the future of businesses. They can also use monitoring ways to see what the businesses is like and how well it operates as a unit or working as teams or even they work better on their own. This can be all used to help owner of the company keep track of the day to day working of the company.
Making management decisions for the future of the company are big decisions to take under as there is a lot of risk that is involved in the expanding of the company. For example the business needs to keep an eye on the company to see whether they could cope with the larger amount of customers that will arrive now they are a bigger company. They could sort this out by offering special training to all new staff members this will make the business more efficient towards their customers. With that they can also monitor the progress of the new employees to see if they are doing their job well and treating the customers with respect. They can also control those plans so that they will fall into the right direction and prove more of a good way for the business.
With these methods that I have said you will help your business succeed as many businesses fall in their first 3 business years.
Measure financial performance (gross and net profit, and value owed to and by the business).
Measuring financial performance is a main aspect that a business needs to succeed in its business life time. As this will help the businesses spends its money wisely and not spend its profit on to unnecessary items that the business does not need.
There are different kinds of profit this will include:
Gross profit is the profit which hasn’t had the employees wages and necessary expenses deducted.
Net profit is the amount of profit that is left over after employee’s wages and necessary expenses have been deducted.
Businesses have ways in which they count out the money to find out their profit. There are processes they can use to calculate all of the money that has been made. By using a computer that will add up all of the money that they have made and then deduct all of the expenses including wages, gas and electrics. This will then give the business a view on what they have made.
There is also a way in which the business can save money and count out the money them selves. This will take longer but the money saved from the usage of this will be greater. But with a person counting the money will have a greater responsibility as if there is a slight miss calculation then it could cause problems for the business and they could spend money they don’t have. This may have a problem on the company as they may decide to buy new computer upgrade for the system, but they can’t do it as they can’t afford these upgrades and so the business will have to find more money.