5 Important Things in the Accounting of Trading Companies & Distributions
Before discussing any further merchandising & distribution companies, it helps to look at the company's classification by its type of activity. That is differentiated between trading companies, service companies and manufacturing companies. The main trading company is engaged in buying and selling of goods. Service companies primarily produce services for sale to consumers who need these services. And the manufacturing company, has business activities to buy raw materials and / or semi-finished materials to be processed into finished goods.
The three companies have different characters in accounting. The most important thing in terms of Inventory. Let's focus on this discussion only about trading companies. The cycle in the main trading company there are four, namely purchases, sales, cash flow and inventory (stock).
In all the cycles that occur in trading companies, it's worth noting 5 Important things in the management of the Trading Company:
Account Account Used by Trading Company
For trading companies, the accounts used are more varied than the type of service or other business. This will be very helpful if the trading company uses accounting software. Because generally softarwe already provide accounts that are in accordance with accounting standards.
Inventory Control
To always exist in managing the trading company, stock is one of the key for the trading company to increase the profit of the company. With the availability of inventory stock, the trading company has competitiveness with similar trading companies. To go to a company with sound financial and competitiveness, usually a trading company makes plans for monthly hospital supplies. This is to find out the real amount of stock recording in the warehouse in physical form with the recording of stock in the office in writing. In the inventory recording of goods in the field of accounting, divided into 2 namely: periodic inventory and perpetual inventory method. Read also Dizzy Articles Managing Inventory Stocks? This is the solution.
In the perpetual method, both sales amount and cost of goods sold and recorded at any time the goods sold. In this way the accounting records will continuously reveal the amount of inventory available.
In the periodic method, the purchase transaction is not debited on the inventory account but debited on the purchase account as well as the sales transaction is not credited to the inventory account but on the sales account.
Smooth Debt - Accounts Receivable
A smooth debt payable becomes a force for always stock availability. Because suppliers will be happy to deliver the goods when our trade payables are always smooth. Similarly, accounts receivable. To help Cash Flow. Age of receivables becomes decisive. Because the cash generator is from the consumer. The longer the age of receivables, the company will be difficult in getting cash. Also read the article of Accounts Payable.
Cash Flow (Cash Flow)
Cash is King, cash is king. The essence of corporate management is the Cash Flow. So with good cash funds organized all activities of the company can always awake. Whether it's for funds for company operations, debts are due or if the company wants to invest, for example by buying land, buildings and so forth. Therefore, financial statements, especially cash inflows and financial cash is very important in determining whether or not the financial condition of the trading company.
Company Profit
To keep the company growing, profit is the key word. Because without profit, the company will always stagnate. When the company is stagnant, it will not compete with competing companies.
Therefore to be able to get the fifth thing, absolutely necessary tools or tools that can provide 5 such information. Currently, most people still use manual records to support their trading business. In fact there are still trading companies or distributors who use manual records in running their business. Obviously software support is the answer. That is accounting software that can provide an overview of the stock, debt & accounts receivable, financial statements such as balance sheet and income statement.
Nowadays a great selection of accounting software. The options exist that emphasize on the stock of trading companies, there is also an integrated for all the information the company needs such as stock of goods, sales and purchase transactions, accounts payable, operating costs and financial reports. Zahir Accounting became one of the options in choosing software to run a trading company. If you would like to know more about Zahir Accounting accounting software please visit http://www.zahiraccounting.com/id
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