Knowing What Happens Inside
Also, some companies where the managers and partners are the same person, there may be doubts as to whether the data provided by the finance and accounting departments are healthy and reliable.
Because of complex nature of accounting and financial reports with big data, they are considered an insignificant data stack which is waste of time to control, by some of managers and shareholders.
The main reasons of it are as follow:
Finance and accounting transactions are recorded in the system incorrectly or incompletely at the first stage. These errors in the first stage cause the later stages to be unreliable. Unfortunately, this situation is very much happening in our country too.
Unsuitable reporting presentation for the senior management
Another problem after the first stage is this situation. Although all records are correct at first stage, reports and information given to the management by sub-units are unclear or reported incorrectly. Even in many companies which has internal reporting system, many reports which are presented to the management are so complicated to understand because of its huge data stack. So reading and interpreting such reports by the managers causes be tiring and boring.
Financial literacy of managers and shareholders
If decision makers don’t have any financial literacy, there isn’t any meanings of number and financial descriptions to make a business decision. For this reason, all activities and its lifetime of the business depend on chance. For stable and durable business, financial literacy is its sine qua non.