Business Insight 106 – Accounts Software For Management Reports? (blog & vlog)


It was as a direct result of this debacle that we started checking and validating every individual sale (after survey) for a minimum profitability based on our suppliers’ order confirmation costs, and we calculated all other actual selling and fitting costs as well. Everything was held (with all suppliers, these were custom-made goods) until the process was completed, and once signed off by our accountant, released to be manufactured.

There was a spreadsheet designed for the weekly throughput, listing each contract and its costs and the sum total, plus actual margins achieved based on these real costs – the only future variables would be unforeseen mistakes or fitting cock-ups.

The margins started to build and build: we developed a thorough understanding of our break even point – probably for the first time – and we never did MATCH PRICING or PAR PRICING again. In the end, there were 13 spreadsheets linked to the production of the monthly management accounts, as well as: our order books, our stocks, our debts, and other vital financial information that the previous accounts system just didn’t cater for.

INSIGHT 106:- Accounts software is designed by accountants for accountants, and only really exists to confirm the beauty of the trial balance and the almost sexual pleasure that the said accountants seem to get from it. Business management software was nowhere to be seen or acquired, hence the spreadsheets. However, for them to prove their validity, the sum totals of each had to tie up to their respective ledgers balances, in the accounts software programme. This was an excellent fail-safe procedure.

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