Use of Accounting Records and Financial Management in Business Transformation

Presentation Outline Definition and Use of Accounting Record Financial Management and Business Transformation Conclusion Case Study and Questions

Definition and Use of Accounting Record Definition –Record is a document that memorializes and provide objective evidence of activities performed, events occurred, results achieved, or statements made. Records are created/received by an organization in routine transaction of its business or in pursuance of its legal obligations. A record may consist of two or more documents. –Accounting records are all documents and books used in the preparation of financial statements, including general ledger, subsidiary ledgers, sales slips, invoices, and so on –It includes various journals (e.g., cash receipts journal, general journal), ledgers (e.g., general ledger, subsidiary ledger), and the sources of information for these formal records such as sales invoices, checks, vouchers, and written agreements

Definition and Use of Accounting Record Uses –Income and Expenditure –Asset and Liability –Cash flow Statement –An Asset is something valuable that an entity owns, benefits from, or has use of, in generating income. In accounting, an asset is something an entity has acquired or purchased, and which has money value (its cost, book value, market value, or residual value). An asset can be (1) something physical, such as cash, machinery, inventory, land and building, (2) an enforceable claim against others, such as accounts receivable, (3) right, such as copyright, patent, trademark, or (4) an assumption, such as goodwill. Assets shown on their owner's balance sheet are usually classified according to the ease with which they can be converted into cash. See also intangible assets and tangible assets. –A Liability is a Claim against the assets, or legal obligations of a person or organization, arising out of past or current transactions or actions. Liabilities require mandatory transfer of assets, or provision of services, at specified dates or in determinable future

Financial Management and Business The term ‘financial management’ has a number of meanings including the administration and maintenance of financial assets. The process of financial management may also include identifying and trying to work around the various risks to which a particular project may be exposed Some experts refer to financial management as the science of money management – the primary usage of the term being in the world of financing business activities. However, the process of financial management is important at all levels of human existence, because every entity needs to look after its finances. From an organizational standpoint, the process of financial management is the process associated with financial planning and financial control. Financial planning seeks to quantify various financial resources available and plan the size and timing of expenditures. In the business world, this means closely monitoring cash flow. The inflow is the amount of money coming into a particular company, while outflow is the record of the expenditure being made by the company in various sources. At the corporate level, the main aim of the process of business organization is to achieve the various goals a company sets at a given point of time. Businesses also seek to generate substantial amounts of profits with the help of a particular set of financial processes.

Financial Management and Business Transformation Financial planning aims to boost the levels of resources at their disposal, while also functioning on money invested in them from external investors. Another goal companies have is to provide investors with sufficient amounts of returns on their investments. At the individual level, financial management mostly involves tailoring expenses as per the financial resources the particular individual has. Individuals who are in a favorable financial position, with surplus cash on hand or access to funding, plan to either invest their money for a positive return (which normally means that they have made more money after calculating the double impact of tax and inflation) or to spend it on discretionary items. Financial decision-making is also an important part of the modern day financial management process. The particular entities involved in financial management also need to be able to take the financial decisions that are intended to benefit them in the long run and achieve their financial aims, which is the basic premise of financial management.

Conclusion You need an Accountant in your Business Seek Financial advisory services extensively before embarking on any Pr

Case Study and Questions Case Study

Thank You for Your Participation