Management Information Systems

A client had a business which was carrying out three separate activities. Although the accounting records were up to date, and monthly management accounts were prepared, these did not help with decision-making as they only showed results for the business as a whole. The owner of the company needed to know how much profit was being made by each separate activity.

We decided that there was no need for a major change in the accounting software being used. Instead the chart of accounts for the existing software was changed to enable income and expenditure to be identified for each activity. A means of splitting shared costs was found, and the book-keeper was trained in the new procedures.

This was a short, cost effective project. One unexpected side effect was that as the client was not sure how much the costs of one of the activities was, he had been cautious when quoting for jobs. Once he knew how much profit was being made from that activity he felt confident enough to reduce his prices slightly. This resulted in an increase of 50% in the conversion rate of quotes. The increase in profit more than paid for the cost of our services.