DESIGN AND IMPLEMENTATION OF A COMPUTERIZED SALES ACCOUNTING SYSTEM

CHAPTER ONE

INTRODUCTION

          Finance is the life wire of any business organization.  It is required for the execution of production, sales and administration of a business operation.  As a discipline, finance is concerned with the acquisition and administration of the use of the firms’ funds as well as profit planning and control sales analysis is inevitable for the effective planning and control of any firm.

To effectively plan for the future, the sales manager should be able to assess the sales position of the firm and relates this to its confronting investment opportunities.  Since funds are scarce, sales analysis helps the sales manager to assess the returns on investment accruing from ploughing the firms’ assets and thereby efficiently allocating resources.

However, sales accounting is the employment of the firm’s balance sheet and income statement to establish some relationship between one figure and another in order to highlight the strengths and weakness of the concerned business.  The balance sheet of a firm is also called the sales position because it shows the position of the business in monetary term at a given point in time while the income statement show how the position depicted by the balance sheet has been attained.  The results of sales analysis are normally expressed as sales ratios, which could be broadly classified as liquidity, leverage, activity and profit ratio.  The suppliers of the firm’s funds and the investing public are usually interested in these ratios.  But the nature of interest expressed on the firm determines the ratios to be emphasized by each concerned parts.  This implies that different people emphasize on different ratios and as a result sales analysis means different thing to different people.

For instance, creditors are interested on those ratios, which measure the ability of the form to service their debts and pay the principal as and when due while the equity owners are interested on the profitability ratios.  The sales manager occupies a unique position in the firm as he should be able to computer interpret and explain these ratios to various interest groups in the firm when the firm requires funds from outside sources, the sales manager should be able to use the relevant ratio to convince investors to supply their funds.  Also the sales manager should be able to justify the reasonableness of some investment or project being under taken by management before the shareholders.

However, the cost involved in the employment of a sales manager makes it mandatory for small-scale companies to engage the services of a sales consultant. The increased use of high-speed computers in various facets of business should popularize the use of sales ratios in business decision.  This is because computer would provide the necessary equipment to handle problems associated with voluminous maze of sales data due to lack of time or more.

This study therefore, aims at the development of a database for sales statements and a set of programs to computer, store and retrieve various sales ratios for some companies.

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