Integrated Accounting System
Small Intеgratеd Accounting: Optimal Timing for Implеmеntation. any business starts from somewhere, it Is borne from the desire to help, to provide, and to generate profit. The reason may differ, but the end is and always has been the same. Aside from the reason, a business will encounter problems unique to their type and to which industry they belong to. The following are two different businesses from different industries, this is based on their actual experience:
There was once a start-up business that started with a capital of Php 10,000. Its business is merchandising, specifically a community retail store, or what we commonly know in the Philippines as a Sari-sari store. It managed to have daily sales of Php 500 to Php 800 every day. The stocks or items were being replenished regularly every week or so. On the surface, business seems to be doing well, yet the owner is saying that at times it seems that it is losing more than it earns. Where, when restocking items, the owner even has to allocate personal funds just to purchase the same number of stocks.
Another Story
A business has been doing well for the past five years or so, to the point that it has grown from a micro business to a small business. As sales keep coming in and orders keep doubling, they have to increase their production capability to meet the market demands. To increase their production capability, capital intensive investment has to be done. This means procuring equipment and machinery, purchasing a much higher volume of raw materials and packaging materials, hiring of workers, and expansion of production area. This sudden growth was a welcome surprise which has its perks, but it also comes with its own problems. As demand increases, the current capacity is strained to its limits, and workers have to work in shifts just to meet deadlines. There is also the problem with the bad orders/defects of packaging materials from the supplier.
As what was being discuss earlier, different businesses in various business stages and operating differently. But both have one common, universal truth when running a business and which can be sum in one word: NUMBERS.
The First Business
It is just basically recordkeeping, as opposed to the more tedious bookkeeping, that should have been religiously observed. With recordkeeping, one just has to faithfully list every transaction up to the last centavo.
With basic recordkeeping, the business owner can see the ins and outs of their money as it happens. While taking into account overhead costs and direct costs – whenever applicable, to capture their profit. They can do it in analog, or by means of pen-and-paper, or digital by using an electronic device.
The Second Business
It is the monitoring of the various business processes that works together to keep the business running. The reports generated from the processes that are given extra attention primarily are the: account receivables, account payables, income statement, balance sheet, and cash flow.
With accurate numbers from real-time reports, a business can then access and make informed decisions based on accurate and reliable information. Especially when a business has just transitioned from micro to small business. It is at this stage that a business is growing and is still refining its processes while securing strong roots on which to anchor on.
Then, we see that it Is not a question of “why” a business needs an integrated accounting system; but rather a question of “when” a business should use an integrated accounting system. It is no longer an option but a necessity; or perhaps a requisite for a business to employ an integrated accounting system to facilitate and cultivate their growth.
An integrated accounting system would help a small business align their business processes, remove redundancies, and reduce errors, while increasing efficiency, effectiveness, and profitability. Small Intеgratеd Accounting: Optimal Timing for Implеmеntation. It automates tasks that would normally consume more time and manpower. It also helps in tracking and monitoring inventory assets, expenditures, and sales. All of which are key performance indicators of a business and help drive growth.
Conclusion:
An integrated accounting system is a commodity; and may considered as a requisite for a small business to run efficiently and effectively; becoming an instrument for growth and improvement.
Thank you for reading Small Intеgratеd Accounting: Optimal Timing for Implеmеntation.
Please visit Active Systems Software, Inc. for more information about GROWING YOUR BUSINESS MORE.
