FIA is an Analytical tool and not an accounting software. FIA analyses the financial information of enterprise to give insights to the Business Owner and Entrepreneur directly on the current and expected performance. Accounting software’s generally give reports based on past performance.
Product based costing compares the unit cost of the product against the unit selling price of each product to calculate Contribution which is not possible in Inventory based or Activity based costing. So, chances of errors are less here.
In my 8-year journey as a Business Consultant, I have observed many enterprises fold up as corrective action was not possible because it was too late. So, FIA was developed to appraise and warn on time the Owners and Entrepreneurs of any impending danger to empower them take remedial action and nurse the enterprise to good health.
FIA is more like a Glucometer used to check blood glucose levels. Simple and easy to use by oneself .
Fill the date as the last date of the month, number of days worked = number of working days, and key in all the costs and sales as actuals to get the Dash board of that month.
No. FIA is an application software and there are lots of backend calculations to present you the results in a dash board. One can save the website ip in the browser or on desktop to save time.
As accurate as the data entered.
All the variables that one inputs including Date, Days, FC, VC, Price and Quantity can be simulated. No Simulated fact sheet or dashboard shall not be saved but one can download or mail for future reference.
Yes, if you heed to the warning and take corrective action. FIA is like a mile stone. If you embark on a 500km journey and have to reach destination in 5 hours, milestones help you to know distance covered and distance to be covered. If one has not covered half the distance in 2.5 hours, one has to increase speed. If you have covered in 2 hours, you have can plan for the 1-hour extra time.
As its monthly based, one has to sum each month’s result, deduct Depreciation or any unaccounted expense to get the PBT.
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