"Since you're preparing two sets of reports (financial and accounting), it's important for your to avoid duplicating data and adding to your workload unnecessarily,' explains Starkey.
Here's how to create both your management accounting reports and financial accounting reports without having to do unnecessary data duplication. Here's what the Practical Accountancy Loose Leaf Service suggests you do
Use these six steps to reduce data duplication
#1: Forecast the type of transactions in your business and separate them into core and non-core business.
#2: Determine the format you'll use for management accounting reports. This includes working out what line items appear where and which ones you'll use to calculate your business's key performance areas.
#3: Understand how your accounting software records and stores transaction data. Familiarise yourself with your system so you understand how it works, etc.
#4: Set up input parameters (also known as general ledger account classifications). Remember, each general ledger will have an allocated account number so you can classify all transactions correctly.
#5: Do a trial balance test. Once your trial balance has been finalised and signed off you can use your accounting software to produce your management accounting reports and financial accounting reports for you.
#6: Let your accounting software produce your reports for you.
Bottom line: By learning how your software package works and how to get the best out of it, you can produce your management accounting reports and financial accounting reports easily and without having to do unnecessary data duplication.
If you need more information on all the accounting records you need to keep to compile your financial reports, get your hands on The Practical Accountancy Loose Leaf. In the Practical Accountancy Loose Leaf we've got a dedicated chapter on accounting records. In it you'll discover: