Finance for non financial personnel - part 5

Finance For Non-Financial Personnel Part 5Business Driven Finance Insights For Laymen

Accounting System

£ ¥ € ₳ ₨$The Structure of Finance For Non-Financial Personnel

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8 presentations altogether, if you cannot find all the links, kindly email [email protected] to request

Part 5

Part 6

Part 7

Part 8

Accounting systems - the systems are not that simple after all and how your own system integrates to them. Accounting systems are not IT systems!

Estimation - any activity (you name it) involves estimation, how can you estimate better? Budget/ Forecast/ Plan. How the financial data so important to you? Lean & agile.

Valuables take-away - how to work on numbers that please your boss? What numbers must you always look at? The hidden financial formula a boss must have.

Decision making - interpret financial information, perform critical ratios analysis, read different reports, and use reports for specific needs. Use management accounting information for your own management needs.

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Accounting Systemis the skeleton that hold the accounting function


But only part of the

whole business system

Operation (Internal)

Management (Internal)

Financial (External)

Reports

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Accounting System

Activities, Transactions & Objectives

Record & Process

Data System

Control model

Business Transactions

Fina

nce

Obj

ectiv

es

Other Business Objectives

R&DSales

FinanceOperationMarketing

CashSales

Purchase

Others

Business Activities

Operation (Internal)

Management (Internal)

Financial (External)

Reports

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Accounting System

Activities, Transactions & Objectives

Equipping

PROCEDURES & POLICIES

TRAINING MANUAL

ERP/ ACCOUNTING APPLICATION

CONTINUOUS LEARNING

ACCOUNTING TEAM

BUSINESS INTELLIGENCE

INTEGRATING TO OTHER SYSTEMS

Record & Process

Data System

Control model

Business Transactions

Fina

nce

Obj

ectiv

es

Other Business Objectives

R&DSales

FinanceOperationMarketing

CashSales

Purchase

Others

Business Activities

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In Summary1. Accounting systems record & manage business

transactions to their activities to report their objectives 2. Accounting systems MUST integrate with other

business systems to smooth the record function.3. Enhance the accounting systems by equipping them

with methodology, technologies, & guidelines.4. Systems include upgrading finance members.5. Accounting systems hold the finance function by:

[mindsets-behaviours-treatments-manage information]

Accounting System Not IT Solution

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Accounting system Illustration


Inventory Management

Goals To Manage

Inventory

● Target cash flow, costs, & inventory level● Track sales and inventory moments● Understand its position for strategic plan● Check point to operate efficiently

Purpose Of Inventory Reports

● Monitor cash flow, profit, & inventory● Holding costs, purchase, & obsolete● Valuation, liquidity, & life-cycle● Efficient by reorder level & EOQ

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Infor. for business activities

● Sale order lead to inventory status check ● Make inventory purchase at reorder level● Move inventory to and for warehouse● Stock count and check

Source document & Controls

● Filing & matching of document● Scanned or physical● Execution procedures & procedures● Internal audit & Segregation of duties

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Input & Process

Data

● Input by barcode, keyboard, handwritten● Manual or computerised storage● All input data will be stored● Process or further process -> reports

Control & Monitor

Business

● Diagnose and interpret the reports● Response to the results in the reports● Positive, negative feedback or new goal● Track progress

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6

Record Activities by transactionsGenerate reportsControl

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Equip by way of rules

● Department mission, goals, & strategies● Accounting policies and core values● Job design and sharing● Learning - upgrade & orientate

Equip by way of

technology

● IT & Non-IT hardware & Infrastructure● Applications (with/ without integration)● Internal/ external security● Level of automation & robot platform

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Integration● Accounting systems facilitate finance department to discharge its duty● Use $ to interact and communicate to inventory function ● Record data; value stock; formula for reorder, minimum order,

Economic order quantity; etc● Inventory function is a integrator for sales and purchase departments so

that the entire supply chain can be establish● Accounting systems make use of inventory function to integrate with the

activities of sales and purchase department

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● You know Accounting System VS IT System

● You appreciate how different systems integrate to the AS

● You know how finance department upgrade their system


Are You On Track?

Look For Next Presentation: Finance For Non-Financial

Personnel - Part 6

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