Many business owners consider accounting to be a necessary evil at best, and a source of empty overhead instead of the business intelligence and management tool that it should be. When deployed correctly, business accounting systems provide insight into every facet of product development, sales and distribution. The ability to accurately cost ingredients, labor, overhead and timing can make a significant impact on profitability and ultimately the success of your business. Generally speaking the larger the company, the more technologically advanced the required systems employed to produce and distribute products and services, the more complex the task of accurately capturing and accounting for the business itself ultimately becomes. You have to know what the “system” is doing in order to be able to know what the actual cost of what the business is creating really is.
Inventory control systems (such as ERP systems) allows a business to go back and determine “based on the amount of orders (we) have, here is the amount of material that’s required, these are the “kits” the material is going to be placed into, and this is what the cost will be when it’s completed, and as a result, the best time to re-order. It is a pipeline flow that must be managed so that an employee in cost accounting can know when to reorder materials. Effective systems should capture the variables associated with these costs, so that a business owner or manager can see cost variances, efficiency variances and measure quality and process controls. The accounting can become quite complex and there is so many layers the management team must get through to understand what is actually happening and make business decisions. When questions arise a business can break the accounting system down into its detailed pieces to get the answers as to where problems may exist and what can be done to reduce cost or improve efficiency.
Allen Barron understands the complexity of these systems, the tax implications of all operations and the importance of having the information necessary to effectively and profitably manage a growing corporation. We invite you to contact us at 866-631-3470 for a free consultation to discuss your business model, and the options available to prepare your company to grow to the next level.