What is Credit Control?
Invoicing and financial management / setting payment terms in T&Cs / avoiding bad debts / chasing invoice payments / observing payment terms / assessing payment procedures
What are Management Accounts?
for internal use to aid in decision making and to track performance on a regular basis
Usually confidential
Statutory Accounts
Compliance with legal and regulatory / external / annually / standardised / publicly available
What is ratio analysis?
the process of using various financial ratios to evaluate a company’s financial performance by analysing relationships between different items in the financial statements
Gross Margin
Revenue less cost of goods sold
i.e. if a farm has £100,000 in revenue and £60,000 in costs associated with producing the crops, the gross margin would be:
100,000-60,000 /100,000 x 100 = 40%
i.e. the farm retains 40% of its revenue after covering direct costs
Cashflow
Tracks all inflows an outflows over a given period
This helps to assess the businesses liquidity and ensure expenses can be covered
A Balance Sheet
is a snapshot of a company’s financial position as a specific point in time
It shows the company’s assets, liabilities and equity
A Profit and Loss Account
shows the company’s financial performance over a specified period. It summarises revenues, expenses and resulting net profit or loss
IAS
To standardise accounting principals globally, ensuring financial statements are transparent, comparable and reliable across different countries and industries
GAAP
Generally Accepted Accounting Principles
the body of accounting standards and regulations that govern financial reporting in the UK.
Principles based approach which allows for professional judgement and flexibility in applying standards
Key concepts
True and Fair View
Accruals Concept
Going Concern
