15   Financial Control

Tracking financial information

You can track financial information at three levels:

  • Accounts level-view the profitability and financial details of your business as a whole.

  • Categories level-view the profitability and financial details of your individual business divisions, departments, properties, offices or locations.

  • Jobs level-view the profitability and financial details of the individual jobs or tasks carried out for customers and clients.

The following example will illustrate how accounts, categories and jobs may be interrelated:

A car dealer has two lines of business-car sales and a service department. The car sales department sells both new and pre-owned vehicles. The service department regularly takes on multiple jobs for particular customers.

You could set up your ABSS software in the following way, although this is just one of many ways.

Accounts

The accounts list could be set up to provide a basic overview of the business's overall performance. For example, the following income accounts could be used:

4-0000 Income [Header]
  4-1000 Car Sales     [Header]
    4-1010 New Car Sales     [Detail]
    4-1020 Pre-owned Car Sales     [Detail]
  4-2000 Service and Parts Income     [Header]
    4-2010 Service Income     [Detail]
    4-2020 Parts Income     [Detail]
    4-2030 Accessories Income     [Detail]

When entering a transaction, the appropriate account is allocated to each individual amount. A standard profit and loss statement can then be printed to show income and expenses generated by the business

Setting up accounts You can set up your accounts using the Easy Setup Assistant or in the Accounts command centre. For more information, see 'To create an account.

Categories

Categories enable you to track the profitability of departments, offices, properties and other business segments.

For example, the sales department of a car dealership could use categories to help them track the profitability of the car models they sell: say, model A, model B and model C.

When entering a transaction, you need to allocate the appropriate category to it. You can then prepare a profit and loss statement for each category.

Categories can be assigned to the following transaction types:

  • spend money
  • receive money
  • transfer money
  • general journal entries
  • sales
  • purchases
  • build items
  • inventory transfers
  • inventory adjustments
  • historical sales and purchases.
NOTE : You cannot allocate categories to certain transactions There are certain transactions to which you cannot allocate a category. These are: Pay Bills, Receive Payments, Prepare Bank Deposit, Settle Returns and Credits/Debits and Pay/Receive Refunds. When entering these transactions, the categories assigned to the original transactions will be used. For example, the categories assigned to purchases appearing in the Pay Bills window will also be assigned to the payment.

To enable allocation of categories

  1. Go to the Setup menu and choose Preferences.
  2. Click the System tab.
  3. Select the Turn on Category Tracking option. If you want to make the selection of a category mandatory for all transactions, choose Required from the list.

To create a category

  1. Go to the Lists menu and choose Categories. The Categories List window appears.
  2. Click New. The Edit Category window appears.
  3. In the Category ID field, type a code that will be used to identify the category and press TAB.
  4. In the Category Name field, type the name of the category.
  5. In the Description field, type a description of the category or notes relating to the category.
  6. Click OK.

Jobs

Jobs can be set up to track income and expenses related to specific jobs. This is particularly useful when multiple jobs are performed for a single customer. When you enter a transaction, the appropriate job number can be assigned to each individual amount. This enables you to associate several jobs with the various amounts in a single transaction.

For example, if a purchase includes parts for three customers, you could select each of the three jobs to which that purchase relates. A profit an loss statement can then be prepared for each job and actual results can be compared with budgeted values to produce a Jobs [Budget Analysis] report.

Similarly, sub-jobs allow you to track individual jobs that form part of a larger job. For example, if you are a graphic designer working on a number of print and multimedia deliverables for your client, you could use sub-jobs to track the individual deliverables: website design, business cards production and brochure layout.

Setting up jobs and sub-jobs You can keep a detailed record of your jobs and sub-jobs. If you intend to use sub-jobs, you first need to create jobs, and then assign sub-jobs to them.

Specific job-tracking tasks may include:

  • organising jobs in a hierarchy
  • setting budgets for each job
  • linking jobs to specific customers
  • assigning jobs to individual line items on transactions
  • tracking reimbursable expenses for your jobs
  • preparing invoices to reimburse job expenses
  • analysing the profit and loss of a job.

There are two types of jobs; header and detail.

  • Header jobs total associated detail jobs (including detail sub-jobs). You cannot assign transactions to header jobs.
  • Detail jobs are assigned to transactions to track income, costs and expenses.

To create a header job

  1. Go to the Lists menu and choose Jobs. The Jobs List window appears.
  2. Click New. The New Job window appears.
  3. Select Header Job and enter a job number, name and description.
  4. If you want to create this job as a sub-job of another header job, type or make a selection from the Sub-job Of field.
  5. Click OK. The header job appears in the Jobs List window.

To create a detail job

  1. Go to the Lists menu and choose Jobs. The Jobs List window appears.
  2. Click New. The New Job window appears.
  3. Select Detail Job.
  4. In the Job Number field, type a code for the job and press TAB.
  5. Enter additional information about the job, such as a job name, description and start date.
  6. If you are creating a sub-job, select a header job in the Sub-job Of list. Note, you can only assign detail jobs to header jobs, not to other detail jobs.
  7. If you want to link the job to a customer, type or select a customer in the Linked Customer field. This is useful if you intend to seek reimbursement for goods and services purchased on the customer's behalf in the future. You can view details of all jobs linked to a customer in the Jobs tab of the customer's card.
  8. Click OK. The Jobs List window reappears.
  9. Review the hierarchy of jobs you have created. If you need to change the details of a job, select the job and click Edit.

To enter opening balances for jobs

If you started using ABSS software while a particular job was in progress, you can create the job and then enter any account activity generated by the job so far in the Job Opening Balances window.

You can enter opening balances only for detail jobs. Header jobs take their balances from the detail jobs below them.

  1. Go to the Setup menu, choose Balances and then Job Opening Balances. The Job Opening Balances window appears.
  2. In the Job Number field, type or select the job for which you want to enter an opening balance.
  3. In the Opening Balances column, type the opening balances for each account.
  4. Repeat from step 2 for each job with an opening balance.
  5. Click OK when you have finished.

To enter budget amounts for jobs

You can enter budgets for detail jobs. The budget information you enter for each job is used to help you assess your progress on a particular job and to determine the job's effect on the state of your business. The amounts you enter will be recorded against accounts in your accounts list for comparison purposes. Once you begin recording transactions for the job, you will be able to print the Jobs [Budget Analysis] report to see a comparison between the actual amounts and the amounts you have budgeted for the job.

  1. Go to the Lists menu and choose Jobs. The Jobs List window appears.
  2. Highlight the detail job for which you want to enter budgets.
  3. Click Budgets. The Job Budgets by Account window appears, with the number of the job you selected in the Job Number field. All your company's income, cost of sales, expense, other income and other expense accounts appear in the scrolling list.
  4. In the Budgets column, type the amounts you have budgeted for specific accounts for this job and then click OK.

Budgets

When you prepare a budget, you are predicting the financial state of your business. For example, you could prepare a budget that predicts how much you intend to spend and earn over the next financial year. Having a budget means that, as the year progresses, you can track projected data against actual data and take corrective action if things are not going according to plan.

You can also use budgets to plan for future goals. For example, you may want to undertake a new business venture in the coming year. By creating a budget, you can work out the amount of money you will need for the venture, where this money will come from, and the impact that the venture will have on other aspects of your business.

What do I need to budget? You can enter budgets for individual detailed accounts. The accounts that require a budget will vary according to your business. Most people prepare budgets for Profit and Loss accounts such as Income, Cost of Sales and Expenses accounts, and Balance Sheet accounts for specific assets and liabilities. To decide on the accounts that will require a budget, consider what changes you anticipate in your business and the financial impacts these changes will have. For example, you may be considering taking a new loan (which will affect your Bank Loans account).

What period can I budget for? You can create a budget for the current financial year and the next financial year.

Reviewing your budget You can review your budgets periodically to track your financial progress and see if it is going to plan. A slight variation from the budget is normal. Large variations, on the other hand, may need investigation. For example, if you have a large increase in accounts receivable, it may indicate that your customers are taking longer than expected to pay their account.

You can compare your budgeted amount with actual account balances by viewing the Budget Analysis reports for Balance Sheet and Profit and Loss accounts. For information on displaying, customising and printing reports, see Chapter 12, 'Reports,'.


Entering budget amounts

You can use the Prepare Budgets window to enter budget amounts for each month of the current or next financial year. If you want to quickly enter budget amounts for a group of months, you can use the Budget Shortcuts window.

As the year progresses, you can choose to either adjust budget figures or leave them unchanged.

Entering positive and negative amounts By default, the amount you enter will be assumed to be a positive amount. You can enter negative budget amounts by inserting a hyphen before the amount (for example, -250). When you enter a negative amount, you are indicating that the balance of the account is going to reduce.

You can also use the previous financial year's data as a basis for your budget.

To enter the budget for an account

  1. Go to the Accounts command centre and click Accounts List. The Accounts List window appears.
  2. Click Budgets. The Prepare Budgets window appears. The window lists the Profit and Loss accounts by default.
  3. From the Financial Year list, choose whether you want to enter a budget for this financial year or the next one.
  4. From the Account Type list, choose the type of account you want to enter a budget for Profit and Loss or Balance Sheet.
  5. For each month, click in the appropriate cell and type the amount. If you want to enter a negative amount, insert a hyphen before the figure (for example, -250). As you enter data, the FY Total column will display the total budget for each account.
    1. The Account Name and FY Total columns display the list of accounts and their current budget totals for the financial year.
    2. You can enter the budget amount for a specific account and month in this section. You can use the horizontal scroll bar to scroll through the months.
    3. Click Shortcuts to open the Budget Shortcuts window from where you can quickly enter budget amounts for the selected account. For more details on this feature, see 'Budget Shortcuts window'.
    4. Click Copy Amount to Following Months to copy the selected amount to the months that follow.
    5. Click Copy Previous Year's Actual Data to insert the previous year's account balances for the selected account and month.
  6. Click Close to close the Prepare Budgets window.

Budget Shortcuts window

If you want to quickly enter budget figures for a group of months, you can use the Budget Shortcuts window. You can use this window to enter quarterly, half-yearly and yearly budgets. You can also enter a budget that increases or decreases by a specific amount every month.

To enter a budget using Budget Shortcuts

  1. Go to the Accounts command centre and click Accounts List. The Accounts List window appears.
  2. Click Budgets. The Prepare Budgets window appears.
  3. Highlight the account you want to enter the budget for by clicking in the appropriate row.
  4. Click Shortcuts. The Budget Shortcuts window appears.
  5. From the Budget for list, select a time period:

    6. The fields change according to the period you select.

    Select If you want to...
    Each Month enter the same amount for every month of the year or a set increase or decrease every month (starting from a base amount)
    Period starting from selected Month enter a total amount for a group of consecutive months
    Each Quarter enter the total amount for each quarter
    Each half of the Financial Year enter the total amount for each half of the year
    Financial Year yyyy enter the total amount for the entire financial year, (where yyyy is your financial year)

  6. Enter the budget amounts in the appropriate fields. Amounts that cover more than one month (such as quarterly, half-yearly and yearly amounts, and amounts for a group of months) will be divided equally among all the months in the group.

    If you selected the Each Month option, you can also set a base budget amount for the first month, and the amount or percentage by which this will vary every month onwards.

  7. When you have finished entering the information, click OK. The Prepare Budgets window reappears with the new amounts entered for the selected account.

    If the account already has budget figures, a message appears asking if you want to replace the existing budget. Click OK to replace the budget, or Cancel if you want to keep the existing amounts (you will be returned to the Budget Shortcuts window where you may need to click Cancel again).

    If you have not entered any amounts for the budget, a message appears asking if you want to enter zero amounts. Click OK if you want to do this, or Cancel if you want to change the amounts.

Auditing your records

A range of features are available to help you ensure the accuracy of the records in your company file. These features are outlined below.

Company Data Auditor

The Company Data Auditor allows you to check the accuracy of the records in your company file. You can use the auditor to perform maintenance tasks and reconcile bank and credit card accounts.

The auditor also checks your transactions for exceptions such as invoices that do not reconcile with your receivables account, future-dated transactions, and audit trail changes. For more information on how to use the Company Data Auditor, see 'Run the Company Data Auditor'.

Audit trail tracking system

You can track specific transactional, account and system changes made to your company file using an audit-trail tracking system. You can then print an Audit Trail report which lists all the changes recorded in a specified date range. To track changes, go to the Setup menu, choose Preferences and then select the Use Audit Trail Tracking option in the Security tab.

The changes that are recorded are outlined below:

Change type Description
Transactional
  • deletion of transaction
  • change of card selection
  • change of ID #
  • change of date
  • change of amount on any line
  • change of account on any line
  • change of item selection
  • change of job selection.
Account
  • change of the current account number
  • change of the account's opening balance
  • addition of a new account
  • deletion of an account.
System
  • Change of the linked account selection inany of the Linked Accounts windows
  • change to the lock periods security preference (this includes changes of the lock period date and the selection/deselection of the preference)
  • change to the Transactions CAN'T be Changed; They must be Reversed preference
  • change to the Use Audit Trail Tracking preference

Reviewing financial information

There are several tools that you can use to review your financial information:

Tool Description
Business Insights Business Insights enables you to analyse information about your cashflow and current cash position
Analyse Balance Sheet window This window provides details about your asset, liability and equity accounts in both graphical and ledger views.
Analyse Profit & Loss This window provides detailed information about your Profit & Loss accounts in both graphical and ledger views.
Analyse Jobs This window allows you to view information about your progress on a particular job, broken down by account.
Financial reports Financial reports help you review of your financial information.

Business Insights

Business Insights enables you to analyse key financial information using a range of interactive tables and graphs. You can use it to analyse your available cash, cash flow, profit and loss, and the money that you owe suppliers and the money that customers owe you. You can open Business Insights from the Accounts command centre.

The Business Insights window presents different types of financial information in four summary panels. From each panel, you can open additional windows to analyse information in more detail.

You can sort the information in tables by clicking in the relevant table column heading. For example, you can sort the list of your accounts by account name or type.

You can also save a graph or table as an image so you can use it in another document. To do this, right-click it and choose:

  • [Graphs only] Save As. Choose where you want to save the image and click Save. This saves the graph as an image file, so you can use it later.

About the Business Insights panel

Click Analyse performance and select the financial year you want to analyse from the Financial Year list. You can view a graph comparing income to expenses each month, a profit and loss graph, and information about your top ten selling items and top ten customers for that selected financial year.

You can use this information to:

  • Identify excessive spending Compare income against expenses and view the resulting profit or loss over a selected financial year.
  • Review your sales performance Identify your top ten customers and top-selling items over a selected financial year.
  • Check account balances Before making a large payment, ensure that the account it is drawn from has sufficient funds.
  • Compare performance between financial years Get a visual comparison of the profit and loss and sales performance of one financial year to another.

Bank accounts and credit cards This panel displays the balances of your bank and credit card accounts and shows the total amount of available cash.

Cash position estimate This panel forecasts your cash balance for the current month and for the next two months. The forecasts are based on your current cash balance and the money you will receive or spend in the forecast period. The forecast information is calculated using the following formula:

total cash balance to date

plus estimates of the customer payments and receive money payments (including recurring payments) that are due to be received during the forecast period

less estimates of the supplier payments and spend money payments (including recurring payments and paycheques) that are due to be paid during the forecast period.

Click Cash analysis to view details of the forecast shown.

You can use this information to:

To analyse your balance sheet

  1. Go to the Accounts command centre and click Analysis. The Analyse Balance Sheet window appears.
  2. Click Filters and choose the time periods and other criteria you want to view.
  3. Click OK. The information you selected appears in the Analyse Balance Sheet window.

To analyse your profit or loss

  1. From any command centre, click the Analysis down arrow and choose Profit and Loss from the menu. The Analyse Profit & Loss window appears.
  2. Click Filters and choose the time periods and other criteria you want to view.
  3. Click OK. The information you selected appears in the Analyse Profit & Loss window.

To analyse your jobs

  1. From any command centre, click the Analysis down arrow and select Jobs. The Analyse Jobs window appears.
  2. In the Job Number field, type or select the job you want to analyse.
  3. If you use budgets to track the progress of this job, enter a value in the Percent Complete field. The budget amounts are adjusted to represent the percentage of the job completed.

To view financial reports

  1. Go to the Reports menu at the top of the screen and choose Index to Reports. The Index to Reports window appears.

  2. Click the Accounts tab.

    There are several account reports that can help you track your financial information. These reports are listed below.

    3. Report Description
    Audit Trail Reviews changes made to recorded transactions, account details and system settings. Note that before you can track and report changes, you need to activate the audit trail tracking preference. For more information, see 'Audit trail tracking system'.
    Profit & Loss Statement Shows your profit and loss figures.
    Balance Sheet Reviews your financial position as of the end of a period.
    Summary Trial Balance

    Identifies amounts incorrectly entered. When reviewing this report, check for:

    • entries that seem unusually high or low for the account that has been affected
    • debit amounts for accounts that normally have credit entries and vice versa
    • unusually high or low ending balances
    • an unusually high or low number of entries for a specific account.
    Balance Sheet
    [Budget Analysis]    		 Lists account balances as at the end of a selected period, along with the budgeted amounts for them. If you have determined that changes need to be made to the amounts you have budgeted for the coming months, you can adjust your budget.
    Profit & Loss
    [Budget Analysis]    		 Lists account balances for a selected period, along with the budgeted amounts for them. If you have determined that changes need to be made to the amounts you have budgeted for the coming months, you can adjust your budget.
    Statement of Cash Flow Shows how your cash position has changed over a period of time, what profit you have earned, where you received additional cash, and where your cash was spent.

    For information on displaying, customising and printing reports, see Chapter 12, Reports.