importance of ratio analysis

IMPORTANCE OF RATIO ANALYSIS

Ratio analysis is a very important factor which is useful to understand financial statements of the company, current position of the company, efficiency in business operations, etc. And, most importantly ratio analysis helps investors to understand the performance of the company so that important decisions can be taken. Ratio analysis can be easily done through software like tally.

Ratio analysis is done by studying data from current & previous financial statements to understand the financial performance of the company. This is useful to know whether the company is growing or not? 

There are many such uses of ratio analysis so in this blog, we will understand the importance of ration analysis in detail.

ratio analysis

 

(1) Helps in analyzing the financial statements: Ratio analysis helps us to understand the financial statements of the company and these financial statements are very important for the stakeholders of the company. By ratio analysis, it becomes easy to understand the comparison of these numbers and it also helps to estimate numbers for the income statements and balance sheet of the company.

(2) Efficiency of the company: By ratio analysis the owners will be able to know the company’s ability to generate the profit. It also helps to understand whether the company is running efficiently or not.

(3) Planning & Forecasting: Ratio analysis helps the management to understand and estimate the company’s future financials. And later it is used for budgeting and planning the future of the business, it means in which direction business has to move and how it has to forward toward the growth.

(4) Identifying Risk: There are many unforeseen risks involved in the business and ration analysis helps in understanding these risks and thus management will be ready to take the necessary actions in advance to avoid the risk or mitigate the effects of risk. Financial ratios like Interest coverage ratio, Debt coverage ratio helps the management to know how much company is dependent on the external capital sources and it also helps to know the  company’ ability to repay debt.

(5) Peers comparison: The management and investors often do the comparison of the company with the peers to know the profitability of the company, market share of the company, etc. Ratio analysis helps to perform SWOT analysis of the company. It also tells whether or not company is growing or not and how much is the growth o the company compared to its competitors. Thus, a proper peer comparison can be done through ratio analysis.

So, these are the benefits of ratio analysis in the company. And, for ratio analysis it is advised to take help of the various softwares available in the market fort that work. And, when ratio analysis is concerned the best software for ratio analysis is undoubtedly – Tally. It is a very effective software that helps company to carry out ratio analysis and also helps in decision-making process of the company by providing various statements that assist in proper decision-making. 

Whether you are in India, UAE, Bahrain, USA, everywhere tally will be very helpful for your business so it is very much advisable to start using tally for your business.

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benefits of inventory management software

BENEFITS OF INVENTORY MANAGEMENT SOFTWARE

Inventory management is a very critical and important thing for every business and if you have a business with multiple product lines where each product line needs segregation, you can do it with the tally software. And, Tally is considered as the best software for inventory management.

In this blog, we will let you know the benefits of inventory management software.

inventory management software

(1) Efficiency and productivity in operations: When you store goods it means you are investing your money and this money gets locked up in the stock and you can’t spend this money. So, if you want to keep the cash flow positive then there should be efficiency in managing the stock. And, cash is one of the most important parts of the business. 

In businesses like pharmaceutics, health, beauty, and many other businesses the product needs to be sold or disposed of before it gets expiry because once the products get expired the products become useless and all the money invested in the stock gets wasted. Thus, it is important to have inventory management software for your business for having efficiency and productivity in the operations. 

(2) Minimize costs and maximize sales & profit: When you have a multi-channel business where sales is done through online and offline modes then you need to manage these sales channels effectively and the goods sold through these channels. Inventory management software allows you to decrease your carrying costs like storage fees, insurance, taxes, theft, etc.

(3) Integration of the entire business: In your company, if your sales staff finds a lead and creates a sales order then the inventory management software lets the entire company know about it and work accordingly to fulfil the sales order. The finance department can later issue the bills for the dispatched sales order. 

(4) Automation of manual tasks: In present days if you do all the data entry tasks and calculations of all the purchase orders manually then you will be lagging behind from all your competitors because today ‘Time is Money’ and thus every firm uses software to make their tasks easy. 

(5) Reducing inaccuracies: Inventory management is not an easy task thus when you try to carry out these inventory management tasks manually then there will be many chances of inaccuracies happening in the business. So, if you start using inventory management software then it will automate all the data recording and tracking processes and thus all the work will be error-free so it is very much important to adopt inventory management software in your business to reduce/remove inaccuracies from the business.

These are the benefits of having inventory management software in your business. And, Tally is considered as the best inventory management software because, with inventory management, Tally also helps in efficient planning and management of the business.

Green FX WLL situated in Bahrain offers high-end TALLY Customization to its clients in Bahrain and many other countries, and it also offers Customized Softwares, Training & Development, and related services. If you want any requirement regarding tally than you can Contact Us.

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tips to manage accounts receivables efficiently

TIPS TO MANAGE ACCOUNTS RECEIVABLES EFFICIENTLY

Accounts receivables mean the money that is yet to be receivable by the customers. Till the money is paid it is treated as account receivables, it is also known as bills receivables. For the smooth running of business operations, it is necessary that account receivables are paid on time.

Account receivables are one of the key sources of cash flow. Inefficiency in managing accounts receivables can impact business severely and also affect the growth of the business. So, it is very much important to manage the accounts receivables efficiently in your business.

tips to manage accounts

In this blog, we will let you know the tips to manage the accounts receivables efficiently.

(1) Keep clean track of bills: For managing the accounts receivables effectively you should keep a clean track of the bills that are treated as accounts receivables. For this, you should keep track of each sales invoice and the respective receipts, it will help in easy tracking of accounts receivables.

(2) Keep attention on long-pending bills: The longer the payment sits as accounts receivable, the longer it will block cash inflow in business, and later it may also turn as bad debt which will result in the loss of the company. So it is very important to keep a close eye on the long-pending bills.

(3) Tracking the payment performance of your customer: Payment performance of the customer means the average number of days the customer takes to pay the bills, it is also known as debtor collection days. The higher the debtor collection days, the higher business has to invest cash to its unpaid accounts receivables. And, the lesser the debtor collection days means the lower cash have to be made available to use. In simple terms, if the customer takes more days then the cash shortage may result thus higher cash is to be kept in business. So the debtor collection days should be less i.e. faster payment should be received from the customers.

Therefore, it is very important to track the payment performance of the customers so that you can know which customer makes timely payment and which customer makes always delay in giving payment, and based on that you can make a plan accordingly to handle these types of customers.

(4) Make a collection schedule and follow up: You should make a schedule for collection from the customers and also follow up. By this, you can build pressure on your customers and receive the payment early. You can also remind your customers by sending them emails with full details regarding their order and the amount that they have to pay and the due date for making their payment.

(5) Use accounting software to manage your accounts receivables: By using accounting software you can track bills easily and fast, also you can maintain the whole work systematically and can remove the errors. Using an accounting software saves your time and effort which you spend on manually dealing with the accounts receivables. Thus, it is very much advisable to use accounting software like tally which can manage your accounts receivables efficiently.

Green FX WLL situated in Bahrain offers high-end TALLY Customization to its clients in Bahrain and many other countries, and it also offers Customized Softwares, Training & Development, and related services. If you want any requirement regarding tally than you can Contact Us.

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how covid-19 has impacted businesses around the world

HOW COVID-19 HAS IMPACTED BUSINESSES AROUND THE WORLD?

After the outbreak of Coronavirus, all the businesses suffered very much due to this. Whether it is manufacturing business, transport business, marketing business, every business has suffered severely due to this pandemic and occurred much loss in their business. 

Companies and businesses are hit by the rapid spread of corona and the revenue of this businesses falled more than 50% and some companies revenue was even NIL because in majority of the countries like India there was total strict lockdown for almost 2 months so there were no economic activities taking place during these times which affected the businesses severely.

how covid 19 has impacted businesses

It is estimated that due to Coronavirus impact the world economy has suffered a loss around 1 Trillion dollars, and that’s a huge number which have not occurred in past anytime. In UAE, India and all around the world the effect of Coronavirus is not limited to few sectors but it has affected almost all the sectors of the economy.

According to a report, between 10th January and 16th March, the 6 major stock exchanges around the world witnessed a decline of average 26%. 

Coronavirus pandemic has not affected only selected industries but almost all industries however the magnitude of impact may vary from sector to sector. But there are 5 sectors/industries that have been most affected due to this pandemic all around the world.

These 5 sectors are: Aviation industry, retail sector, financial sector, realty sector, and automobile industry. These sectors are suffering most severely due to this pandemic. 

After these sectors, small businesses and startups are the most hit due to this pandemic and according to a report due to Coronavirus pandemic and lockdown around 50% to 70% startups are closed in this period. And, the owners of small businesses are also very much affected due to this pandemic and many are facing difficulties to meet their ends.

The COVID 19 pandemic has hampered the economy all around the world as a result of which major industry leaders also have lowered their forecasted revenue for the upcoming quarters. However, the governments of all the countries are taking steps to curb the economic effects caused by the Coronavirus by taking various economic steps and announcing economic packages to help the businesses. And also all countries are now opening up and economic activities are also coming back on track slowly so it is hopeful that the world economy will be back to the track not immediately but slowly it will be surely back to the normal.

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IMPORTANT FEATURES IN TALLY FOR A MANUFACTURING BUSINESS

IMPORTANT FEATURES IN TALLY FOR A MANUFACTURING BUSINESS

In manufacturing business, there are a lot of complicated tasks like tracking of goods from raw material to finished goods. And, due to these reasons, it becomes very necessary to maintain software that tracks the movement of all the goods. But, choosing software is also a difficult task and you may be thinking about which software to use, but there are very few software that tracks the inventory and helps in business operations.

Tally.ERP 9 is one such software that tracks your stock, cash-flow and maintain various other information like your employee records. The features like these will help you to gain insights and overview the situation of the business and take corrected actions if required.

In this blog, we will let you know some of the most important features of tally which are very useful for a manufacturing business.

  1. Handling all type of goods: The users can easily record the raw-materials and their consumption for finished goods or semi-finished goods in tally. They can also group the stock and then check the stock according to their group, it enables ease of maintaining information and you can access the data very easily when you require it.
  2. Inventory Management:  In manufacturing business, the stock keeps moving from one place to another but with tally you can track moving stock across the different locations. It also keeps the track of stock that is lying in third party locations and most importantly you can also calculate the valuation of your stocks through various methods like FIFO, LIFO.
  3. Reverse Charge Mechanism: Normally in a manufacturing business reverse charge has to be applied every time when goods are purchased from an unregistered dealer. These self-invoices can be directly generated from Tally.
  4. Cost Centres: Tally software has also provisions for cost centres so the owners can allocate costs to the cost centres. They can also identify employees as cost centres to tag any cost associated with them.
  5. Batch-wise expiry: In many manufacturing businesses, sorting of the stock is done as per their expiry date to avoid stock getting wasted. Tally software helps to sort the inventory according to its expiry date and thus it can be assured that the stock is not wasted.
  6. Business reports: With the help of tally you can get all the business reports like profit and loss statement, cash flow report, balance sheet, etc. These reports can give a clear picture of your business so that later you can take important decisions through these reports. 
  7. Quality Control: In manufacturing business, it becomes very important to pay utmost attention to the quality of the end products and not onlyend products but all the raw materials, semi-finished goods need to be up to the quality standards. So tally has a solution for that also because it gives option to check the products as per pre-defined quality standards/criteria.

So, these are some of the important features of the tally for manufacturing business and it’s also been used by many manufacturers to make their work easy and fast. Basically, Tally is a complete business management software which should be used in all types of business as it makes the work super easy and provides efficiency in the businesses.

Green FX WLL offers high-end TALLY Customization to its clients in Bahrain, and it also offers Customized Softwares, Training & Development, and related services.

 

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