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Homework answers / question archive / Financial information systems can serve many functions in a business
Financial information systems can serve many functions in a business. How might you use them in your business? Which do you think you would need in the beginning?financial accounting information or managerial accounting information? How might financial information change the way you run your business?
As a small business owner, information can be one of your key assets. Why must you, as a business owner, manage information as a resource?
How might the Internet and related communication technologies change your business? What are some of the ways that information technology can improve productivity and performance in your business?
I hadn't thought of financial information in terms of being a resource, but you are absolutely right. Following are some kinds of information that can be produced from that resource:
1. the bank balance
2. the balance of accounts receivable and accounts payable
3. amounts due for loans and other liabilities
4. gross margin calculations
5. ratio analysis and break even calculations
6. a balance sheet for a bank or equipment loan
7. information from which to assess your tax liability
8. equity position for the company for ratio analysis
Many decisions would be quite uninformed without the resource of financial information.
When you have inventory, you must use accrual accounting rather than cash basis. Managerial accounting is a natural extension of accrual accounting capabilities when there are multiple products which need analysis. Quickbooks is a great place to start, and that software has the capacity to grow with a business for quite a long time. It can be set up for cost accounting purposes too.
Information is feedback and how can you judge the success of your decisions without feedback?
Internet and other communication technologies have dramatically changed most every business with speed, marketing, ordering, more customer exposure, as well as sources of information for 'how am I doing' and 'how can I do it better'.
