An effective accounting program is the key to understanding the impact that choices have on a company’s bottom line.
Whether it’s making decisions about ordering stock, adding staff or running promotional activities, good reporting makes a big difference, an article on Dynamic Business’ website explains.
For organizations driving at least 50 percent of their revenue selling labor services, integrating their “source documents” to feed their financial system with timely and accurate data will make reporting and decision making much easier.
If field services agencies go out today and do work with a customer and can’t enter this data into the system at the time it happens, they’re just delaying the time when they’ll receive their payment and when they can start making collection calls, if necessary.
The Dynamic Business article outlines four reports that any field services firm should be able to easily run.
- Cash flow: Managing cash flow is a big hurdle for many businesses. A cash flow forecast compares cash on hand and money that you’re owed against the money you must pay within the same period. Having cash readily available is imperative to success.
- Balance sheet: This statement represents a company’s financial position at any given point in time. The balance sheet shows assets versus its liabilities, or in other words, what the company owns and what it owes.
- Profit and loss: A profit and loss statement highlights trading results over any period of time. It’s best to compare specific months, quarters or years to get a clear picture of the company’s performance. That way the company can pinpoint exactly when a downward trend started and begin to find out why.
- Accounts receivable and accounts payable: The accounts receivable aging summary indicates which customers owe a company money and for how long that money has been outstanding. The accounts payable aging summary complements that by showing to whom the company owes money and for how long that money has been outstanding.
Source: Dynamic Business, September 2012