A Report to Style Ltd on Managing Accounts

Question: 1 Explain the sales ledger, purchase ledger and nominal ledger. 2 Explain the double-entry bookkeeping system of recording transactions. 3 Design a simple accounting system using accounting codes. 4 Extract a trial balance and prepare financial statements from source documents. Answer: Essentiality of Accounts It is not easy to manage a business in this competitive world, especially if the field chosen does not have a speciality product or is based on an invention which has outstanding scope for a future market. You have selected a market segment with a general tag line of fashion and style wear. The biggest advantage for this type of trade is the ever changing demand of the youth for new fashion and style. And this can also turn into the biggest disadvantage for your business if you are not able to keep pace with the changing fashion world. For attaining this achievement, you have to wisely choose your products and keep changing the stock at a short notice. This means, as per Baker Riddick, (2013), selling more on cash, keeping a low inventory and managing the customer base. These three essentialities are foremost requirements of the business from a good accounting software as this report is putting forth for your perusal. Keeping Good Records A good accounting software automatically covers the following factors gives you the information required by you to run your business helps you to minimise your expenses and also helps in reducing tax obligations helps you to quickly prepare your accounts for any specific time period helps you to plan effectively for your tax obligations, says Davies, (2012). Improvising Your Business A good accounting software will help you to identify the strengths and weaknesses of your business manage the changes and improvements you carry out in your business plan efficiently in meeting your financial commitments timely pay your creditors and employees identify your tax liabilities and fulfil your obligations on time Maintaining Good Relations A good accounting software is also beneficial as it helps you to make it easy to sell your outdated goods by letting you select them in time avoid any embarrassment because of over or under payments to maintain a steady profit base Although business records were being maintained manually also some decades ago, but the advantages obtained from computerised systems helps the business to remain online and the promoters can always remain in touch with the business. But this requires you to ensure that the system used by you is easy to operate and also complements your business requirements. It should also be able to provide information about your invoices, receipts and bank statements, as per Marchildon McDowall, (2013). Hence, keeping your business records can really be beneficial for enhancing your business potential. Todays business environment makes it mandatory for every business, assert Keown et al, (2012), to keep its records for the period as stipulated under the law of the land. The minimum period requirement for keeping your business records available for the tax authorities is six years under the VAT regulations and five years under the income tax rules. Maintaining your accounts using a computerised system will ensure that all your business details regarding receipts, payments, sales invoices, credit purchase vouchers and the assets and liabilities are kept safely, as detailed by Homann, Koslowski Luetge (ed.), (2013). Business Value of SAGE 50 SAGE 50 accounting software can make a contribution to your business as it simplifies your otherwise complex accounting tasks, eliminates the repetitive accounting routines and speeds-up the whole accounting process by delivering an enhanced levels of efficiency and satisfaction for the owners as well as the staff. Management has the advantage of assessing the current financial situation of the business and to act quickly in solving problems. The companys marketing department has access to an efficient system which helps in analysing the trends and in identifying new targets. As an efficient and reliable business tool, SAGE 50 accounting software offers immense versatility, accurate maintenance of sales and purchases, an updated stock control and a competent order processing, invoicing along with statements and reports, as per Yona, (2011). Expanded Currency Field Lengths This latest feature of SAGE 50 enables the users to record and view on the transaction screens amounts up to $99,999,999,999,999.00000. It also has the facility of list views, dashboard reports, tax forms, account registers and inventory item history tab screen. This product is also suitable for companies which deal in currencies other than the USD or GBP. Another big advantage offered by this product especially for Style Ltd is that the company can track large quantities of small inventory items for accurate reporting. Business Intelligence Enhancements Enhanced Business Intelligence built-in in the system will allow your company in attaining insight about the information gathered and in estimating time and data while formatting the data. A new feature of Inventory Analysis Report offers a real-time inventory information which can help you in better forecasting the sale pattern of your merchandise and manage an efficient supply chain, says Yona, (2011). Simplicity of SAGE 50 SAGE 50 has been made as a customer friendly product. Hence, it prepares accounting solutions which are user-friendly, are available instantly and the software has a design which enables the user to install and work on the system with minimal outside technical assistance. As a new entrant in the retail trade, SAGE 50 will ably assist you in assessing the possible tax repercussions and shall offer you an easy to read and understand financial data through its Chart of Accounts, banking reporting and particularly in payroll, payables and receivable statements, as explained by Leung, Coram Cooper, (2012). SAGE 50 basically works with the familiar procedures of manual accounting. Invoices, bank statements and VAT returns appear on the screen exactly as they appear when seen manually. When you start working on the SAGE 50 accounting software, you are continuously monitored by the intelligent system and a regular display of on-screen prompts helps you to create, access, file and also update all the financial information which has been posted by you. The in-built Wizards of SAGE 50 continuously guide you through a complicated process, step by step, in case you face any difficulty. Manage your Finances, Customers Suppliers with ease A powerful software that manages cash flow and VAT by creating customised reports. It offers everything which you require for managing your customers and suppliers data in order to efficiently process your sales and purchase orders. Dealing with Foreign Currencies and Payments You can manage multiple currency transactions, payments and even cash, cheque and cards, including direct debits and discounts, as these are standard features of this accounting software, details Baker Riddick, (2013). Flexibility as Your Business Grows This accounting software enables you to add up to 20 users and is future ready for your expanding business. Desktop Reliability with Online Access With its flexible option of connecting to apps, you can stay connected and work while being away from the office. Your access will provide you with real-time information and data through the Sage Drive feature via a tablet or a smartphone. Automatic Updates The system is equipped for upgrading to the latest version of the product. Your system will automatically update itself with new features. Flexible Pricing and Support For new business entrants, the system is available on monthly subscriptions with 12 to 24 month payment plans. Automate Your Processes The software helps you to save your time and money through the use of its simple bank reconciliation, automatic VAT preparation and submission and an advanced stock control feature. These easy to work features allow you to stay focussed on your business. After all, this is what matters most to you, assert Baker Riddick, (2013). A Smarter Payment Gateway With the help of the Sage Payment feature, you have the power to make accurate, secure and direct payments to your suppliers, straight from your system, ensuring youre your suppliers are kept happy. References: Baker, H.K. and Riddick, L.A. 2013, International Finance: A Survey. OUP USA, Oxford. Davies, A. 2012, The Globalisation of Corporate Governance. Gower Publishing, Ltd., Surrey. Homann, K., Koslowski, P. and Luetge, C. (ed.) 2013, Globalisation and Business Ethics Law, Ethics and Economics. Ashgate Publishing, Ltd., Hampshire. Keown, A.J., Martin, J.D., Petty, J.W. and Scott, D.F. 2012, Financial Management: Principles and Applications, 10th ed. Pearson Education India, New Delhi. Leung, P., Coram, P. and Cooper, B.J. 2012, Modern Auditing and Assurance Services, 5th ed. John Wiley Sons, Milton, QLD. Marchildon, G.P. and McDowall, D. 2013, Canadian Multinationals and International Finance. Routledge, New York. Yona, L. 2011, International Finance for Developing Countries. Author House, Keynes.