- Description
- Specifications
The financial accounts prepared at the end of the financial year by your Professional Accountant which are used to prepare your business's income tax return do not assist you on a month by month basis in the actual operation of the business.
This paper suggests that all businesses should segregate their business activities into the individual components e.g:
- Store
- Wholesale Division
- Retail
- Delivery
- Land and Buildings
and that individual Profit & Loss Accounts and Key Performance Indicators should be prepared on a monthly basis for each of these business units so that the Manager has a detailed understanding of the actual performance of the individual business unit.
It is not unknown for a business to appear to be trading satisfactorily, when in fact one of the business units is losing considerable sums of money. Unless an individual business unit Profit & Loss is prepared, it will be virtually impossible to detect that there are major problems in one of the segregated business unit activities.
This paper, presents suggestions on how a business should be segregated into business units and the type of information to be prepared. The paper is presented under the following headings:
- Management Departmentalised Accounts - Helps Managers To Manage
- Identify Business Units Or Activities For Management Accounts
- Intra-Business Sales
- Salaries For Proprietors
- Treatment Of Properties
- Interest
- Allocation Of Direct Costs
- Administration Business Unit
- Details Within Management Accounts
- Business Unit Trading And Profit & Loss Account
- Key Performance Indicators
- Business Unit Balance Sheet
- Reconciliation Of Intra-Company Accounts
- Dissection Into Customers For Management Accounts
- Consolidated Accounts
- Benefits From Management Accounts
- Professional Assistance