Page 400 - Business Principles and Management

Chapter

Business Financial Records 15

15.1 Types of Financial Records

15.2 Budgets and Budgeting

15.3 Financial Reports
15.4 Analyzing Financial Data

RE ALITY CHECK

Do I Need to Be an Accountant?

lark walked the two blocks from his paint store to the bank. He always
liked taking his deposits to the bank, although he knew that he should
C be doing the paperwork instead of depending on the tellers to handle it.
Clark’s business had had a lot of sales the previous week, and he felt
a bit uneasy carrying today’s large deposit. Although most of the deposit
wasn’t cash, he realized he needed a better way to keep track of receipts
and payments. As he walked into the bank, he recalled that his accountant
had told him last month he had to keep better daily and weekly records.
Clark greeted the teller. “Good morning, Monica. I’ve got a stack for you
today. Business has been good!”
Monica looked unhappy. “Clark, that stack will take me forever to com-
plete. Haven’t you gotten someone to help you with your bookkeeping?”
“Not really,” Clark replied, “but I’m thinking about it.”
Monica smiled. “You’ve been thinking about it for over a year. How do
you know from day to day what’s happening with your money? You must
be having some problems—last month you overdrew your account and now
you’re overdrawn again. My boss wants to see you right away.”
Clark knew he had to keep better records, but he thought nothing could
cloud his image of today’s big deposit. However, the bank manager, Jerri
Steen, was about to change his opinion. Clark was often uncomfortable
talking to bankers. They always talked about his financial standing, finan-
cial ratios, and the bottom line, most of which made little sense to him.
“Either your current assets are too low or your current liabilities are too
high,” Jerri said. “If you want us to continue your loan, you have to improve
your working capital. Your inventory turnover may be good, but you’re not
generating enough profit on your sales.”
“I’m going to have to take an accounting course,” Clark thought to him-
self. “It seems Jerri and my accountant talk to me in a foreign language, and
I’ve got to learn what they mean. That bank loan is just too important.”

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