Business owners use financial statements to calculate tax payments and dividends. However, do you prepare and utilize monthly financial statements for monitoring management activities? Set the target sales and the target profit ratio, put the targets into each account, compare them with the actual results, grasp the problem areas, consider and implement improvement measures at the meeting with the cost generation department, and at the next month’s meeting Check the improvement effect. If you do not monitor business activities by PDCA cycle idea in this way, the problem may grow and you may incur a large loss without noticing it.
For example, in case that sales are increasing but profits are decreasing, it may be just a bookkeeping error such as a shift in the recording time of sales or purchases or an omission in counting the inventory quantity, but it may be traded at an unapproved unit price or lost in stock or have been fraudulently generated.
Such mistakes and frauds can be easily detected as abnormal values by comparing with some criteria (budget, previous month’s results, and the same period of the previous year). Compared to the budget, which is the goal to be achieved, the progress can be grasped and actions can be taken in the unachieved department at an early stage. We recommend that you build a budget management system.
Our management accounting service will first conduct hearings at the beginning of the year and create a monthly budget. After that, during the period, we will compare the actual data received from your accounting staff or bookkeeping agency with the budget every month, interview the person in charge or bookkeeping agency, analyze the cause of the difference, and report. (We also assist in internal audits and internal control construction as necessary.)