سمر حداد

Accounting Department and Financial Statements All businesses must keep some form of accounting system to monitor the financial results of a business. The financial statements help management gauge the profitability of a business within a given period. The accounting department is responsible for the preparation and analysis of the financial statements. They can monitor sales trends and expense trends in the business that can provide management with the information it needs to make plans for expansion or cost reductions. Some of the most important expenditures a business can make are in the areas of marketing and advertising. A business must be able to market its goods and services, however they must also be able to manage the cost of the marketing and advertising efforts. Marketing Reports The marketing department of a company sets up programs to increase sales via advertising and sales promotions. These can include direct advertising programs such as radio and television campaigns to indirect programs that include involvement in community and public organizations. The marketing department prepares a variety of reports designed to assist management in processes of determining sales strategies that work. Reports might include gross sales per campaign or even customer hits on a website advertisement. Marketing is always looking for the best way to promote a business within the confines of the company budget. Ratio Analysis Management is always looking at the relationship between sales and costs. These are called ratios. For example, a typical ratio is the gross-expense ratio. This measures the gross expenses of a company with the gross sales. For example, if the gross monthly expenses in a period are $100,000 and the gross income is $200,000, the gross expense ratio is 50 percent ($100,000 divided by $200,000.) The gross expense ratio can be further broken down into expenses related to important departments in the company, such as marketing. Accounting and marketing should work closely to monitor the ratios of advertising and marketing expenses to gross sales. For example, if marketing expenses are increased in a period, but sales remain constant, management may decide that the marketing expenses were inefficient. This is called ratio analysis. Considerations Marketing and accounting must work closely so that management can see where the marketing campaigns are successful. Another reason marketing and accounting work closely together is to prepare budgets for future expenditures in the fields of marketing and advertising. By looking at past financial results, management can budget future expenditures for the marketing campaigns. It’s then the accounting department’s role to measure the marketing departments adherence to budget limits and also the efficiency of the budgets that have been utilized.