JURILMA: Jurnal Ilmu Manajemen Indonesia
Volume. 1 No. 1 (2024): Juni, Halaman 49 -Halaman 56.
E- ISSN: 3046-9538 (Online), DOI: …..
https://ejournal.rizaniamedia.com/index.php/jurilma
Exploring the Role of Accounting Practices and Financial
Analysis: A Case Study in Perfect Zone Buraidah
Kurniawan Arif Maspul*1, Ahmed Mohammed Akrem2
University of the People, California US1
Hope University College, Addis Ababa Ethiopia2
Email : kurniawanarifmaspul@my.uopeople.edu1
Email : ahmad@perfectzone.co 2
*Email Correspondence: kurniawanarifmaspul@my.uopeople.edu
ABSTRACT
This compelling case study delves into the critical role of accounting techniques and financial analysis in business
management. The study explores the obstacles faced and the approaches used to overcome them by drawing on
the firsthand experiences of an accountant at a startup business. Through the exploratory qualitative analyses, the
study emphasizes the importance of precise inventory management, budgeting and forecasting, financial
monitoring, and sales performance analysis in attaining long-term growth and profitability. The findings
emphasize the significance of combining accounting theories and practices in order to make informed decisions
and achieve financial success. The study continues by underlining the importance of continuous financial planning
and adaption in order to support long-term corporate growth.
Kata kunci: Accounting; Inventory management; Budgeting and forecasting; Financial monitoring; Sales
performance analysis
INTRODUCTION
Accounting
techniques
and
financial analysis are critical to the
performance and sustainability of firms
across a wide range of industries. These
practices provide important insights into a
company's financial health, aid in decisionmaking, and contribute to long-term growth
and profitability (Ameer & Othman, 2012;
Collier, 2015). This article gives a complete
case study that investigates the experiences
of an accountant who has been working at a
new business for one year. The study's goal
is to look at the issues that accountants face,
as well as the accounting theories and
techniques that are used to overcome them.
The study intends to provide significant
insights into the significance of accounting
methods in financial management by
investigating these factors.
Perfect Zone is a new enterprise in
Buraydah that specializes in the sale of
fresh flowers, but it represents a small and
relatively unknown SME in need of
attention. Despite its potential to boost the
local economy and sustain a shift in the
flower sales industry, which has grown in
importance as Al Qassim people adopt new
cultural
norms such as sending
congratulations messages and more.
Accountants play a critical role in this
initiative beyond simply being accountable;
they also manage and control operations
within this fledgling corporation, reporting
directly to the CEO.
While the background introduces
Perfect Zone as a new player in Buraydah's
flower industry, there is a noticeable lack of
urgency over the chosen issue. Delving
deeper into the phenomenon of blooming
49
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
SMEs such as Perfect Zone, as well as the
hurdles they face in establishing themselves
within the startup environment, will help to
strengthen the story. The necessity of good
accounting methods in overcoming
common startup challenges, such as limited
resources,
tough
competition,
and
navigating regulatory frameworks, is
highlighted. Furthermore, giving case
studies or real-life examples of how these
obstacles directly affect accounting
operations within companies will provide
significant insights into the importance of
addressing these issues early on.
Meanwhile, as accountants must
gain a thorough understanding of a
company's organizational efficiency and
financial position. This knowledge serves
as the foundation for owners' and
stakeholders' decision-making (Elliott &
Elliott, 2015). Accountants can discover
opportunities for development, make
educated decisions, and promote financial
stability by reviewing the entire
performance of the organization. Accurate
inventory management is critical to
guaranteeing corporate cost sustainability.
Companies can control expenses, reduce
wasteful inventories, and optimize resource
allocation by employing effective tracking
systems (Richards, 2017; Warren et al.,
2020). Inefficient inventory management
can result in increased expenses and
financial inefficiencies, emphasizing the
importance of accountants establishing
strong inventory management processes.
Budgeting and forecasting are
critical components of financial planning
and decision-making. Businesses can
manage resources more efficiently and
anticipate financial demands by developing
comprehensive budgets that account for
future purchases and expenses (Weygandt
et al., 2018). Accountants can use this
approach to establish a clear financial
roadmap, ensuring that the business runs
within its limits and meets its financial
objectives.
Similarly,
firms
face
considerable hurdles in tracking spending
and accurately estimating income.
Financial analysis and decision-making
processes can be hampered by inaccurate
financial data and the absence of effective
expense monitoring tools. Accountants
must address these issues by developing
effective financial monitoring techniques,
assuring accurate financial reporting, and
delivering reliable data for decision-making
(Kimmel et al., 2018).
Financial analysis is critical in
assessing sales performance and overall
business success. Accountants obtain
significant insights into the effectiveness of
sales strategies, revenue production, and
opportunities
for
development
by
evaluating sales numbers. This research
enables firms to make data-driven
decisions, improve sales performance, and
meet profit targets (Horngren, 1978). The
relevance of competent accounting
processes and financial analysis in
corporate management is highlighted in this
case study. Accountants may greatly help to
a company's financial success by
recognizing organizational efficiency,
adopting precise inventory management,
conducting budgeting and forecasting,
monitoring spending, and reviewing sales
performance. Accounting theories and
practices are important in allowing
informed decision-making, guaranteeing
cost
sustainability,
and
achieving
profitability, according to the findings.
Businesses can handle problems and seek
for long-term growth and success by
50
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
constantly analyzing and revising financial
strategy.
budgeting, and forecasting for future
purchases and expenses.
METHOD
Challenges and Initial Assessment
To provide a nuanced qualitative
analysis of inventory management and sales
performance at Perfect Zone, a prominent
flower shop in Buraidah, Saudi Arabia.
This case study employs a rigorous
methodology that integrates firsthand
experience observation, a comprehensive
practice report, and an extensive literature
review. The author obtained firsthand
insight into the issues faced and watched
the implementation of several techniques
through direct involvement in the shop's
operations. A full practice report was
created, describing the precise approaches
used, how they were implemented, and the
results obtained. The study also used
scholarly literature to contextualize the
findings and compare them to existing ideas
and best practices. This methodology
provides a compelling and thorough
assessment of Perfect Zone's inventory
management and sales performance by
smoothly merging these parts, offering
useful insights to both academic study and
practical implementations.
Several obstacles may develop
while beginning a new career as an
accountant, necessitating an awareness of
the entire functioning of the organization.
Key considerations to consider include:
how well-organized is the business? Is there
any outstanding debt, and if so, is it being
paid? What was the company's profitability
in the previous year? These questions are
important markers for assessing the
company's performance and financial
standing (Horngren, 1978). The accountant
found issues that needed repair shortly after
starting work. Asset depreciation was not
accurately reported, subscriptions were
only partially accounted for, and inventory
items were not included in the financial
statements. To ensure accurate financial
reporting and decision-making, these
difficulties had to be resolved (Akrem &
Maspul, 2024; Kimmel et al., 2018).
RESULT AND DISCUSSION
An accountant's position in any
business establishment is crucial in
knowing the organization's financial health
and providing a framework for decisionmaking by owners and stakeholders (Elliott
& Elliott, 2015). This article gives a case
study of an accountant who has been
working for a year in a new business,
highlighting the issues encountered as well
as the accounting theories and techniques
used to address them. The emphasis is on
inventory management, cost sustainability,
To address these issues and enhance
accounting methods, the accountant applied
a number of financial and management
theories. The notion of Generally Accepted
Accounting Principles (GAAP) is one such
theory, which provides a framework for
uniform and transparent financial reporting
(Elliott & Elliott, 2015). The accountant
ensured that the financial statements
appropriately reflected the business's
financial status and performance by
complying to GAAP. The Matching
Principle, which stipulates that expenses
should be recognized in the same period as
revenues, is another relevant idea
(Weygandt et al., 2018). The accountant
used the Matching Principle by
appropriately
recording
depreciation
51
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
charges and accounting for subscriptions,
aligning expenses with the related revenuegenerating activities.
To
solve
inventory-related
concerns, the accountant additionally
applied Inventory Management theory.
This theory highlights the significance of
effectively managing and valuing inventory
in order to achieve optimal resource
allocation and cost control (Warren et al.,
2020). The accountant improved the
accuracy of the financial statements and
promoted informed decision-making by
establishing
excellent
inventory
management techniques such as regular
physical counts and using appropriate
costing methodologies.
Financial analysis theories were
also useful in addressing the accountant's
problems. Ratio analysis, for example,
aided in assessing the company's liquidity,
profitability, and solvency by examining
important financial ratios (Horngren,
1978). This research gave insight into the
company's financial health and revealed
areas that needed to be addressed, such as
enhancing liquidity or reducing debt. To
address the demand for reliable financial
planning, the accountant applied Budgeting
and Forecasting theory. The accountant
forecasted future expenses, revenues, and
cash flows by developing comprehensive
budgets and financial forecasts, allowing
for optimal resource allocation and
informed decision-making (Horngren,
2009; Weygandt et al., 2018).
Inventory Management and Expense
Control
To
address
the
inventory
management problem, the accountant
prioritized the implementation of an
effective inventory tracking system.
Employees purchased additional products
from outside stores due to a lack of efficient
inventory tracking, resulting in increased
inventory and excessive expenses. The
accountant was able to streamline the
purchasing process and cut expenses by
developing a strong system (Warren et al.,
2020). The use of numerous financial and
management theories is required for
effective inventory management. The
Economic Order Quantity (EOQ) model is
one such theory that helps calculate the
ideal order quantity that minimizes
inventory carrying costs and ordering
expenses (Horngren, 1978). The accountant
optimized inventory levels and decreased
the risk of stockouts or overstocking by
calculating the EOQ and determining
suitable reorder points.
The accountant also used the Justin-Time (JIT) inventory management
principle. JIT prioritizes inventory
reduction by obtaining goods from
suppliers just in time for production or
customer demand (Elliott & Elliott, 2015).
The accountant reduced inventory holding
costs and improved cash flow by employing
JIT methods such as keeping good
connections with suppliers and utilizing
efficient delivery systems. Another critical
area handled by the accountant was expense
control. The accountant developed a
detailed budget for the following three
months, including all necessary payments,
by meticulously noting all subscriptions.
This enabled better financial planning and
resource allocation (Weygandt et al., 2018).
In this context, the concept of ZeroBased Budgeting (ZBB) is relevant. Rather
of depending on historical spending trends,
ZBB requires a rationale for every expense,
52
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
starting with zero (Kimmel et al., 2018).
Using ZBB, the accountant scrutinized each
subscription and its cost, verifying that
spending were in line with the company's
goals and priorities. A crucial component of
management accounting, variance analysis,
was also used to monitor and control
spending. The accountant noticed any
substantial variances and analyzed the
underlying causes by comparing actual
expenses to projected levels (Horngren,
1978). This analysis enabled early remedial
steps to be made, ensuring that costs were
kept under control.
Financial
Analysis
Performance
and
Sales
During the purchase record review,
the accountant discovered inflated bills that
went unreported by store staff. The
company was able to reduce costs and boost
profitability by resolving this issue (Elliott
& Elliott, 2015). Financial analysis is
critical in assessing a company's
performance and determining areas for
development. Ratio analysis is a common
tool in financial analysis. Ratio analysis is
the process of computing and analyzing
numerous financial ratios in order to
evaluate
a
company's
liquidity,
profitability, and solvency (Horngren,
1978). Through ratio analysis, the
accountant was able to detect inflated bills,
which had a detrimental impact on the
company's profitability.
Aside from ratio analysis, the
concept of cost control is critical for
increasing profitability. Cost control is the
management and reduction of expenses in
order to improve a company's financial
performance. The accountant efficiently
adopted cost control methods by detecting
and correcting the overcharged bills,
resulting in lower costs and increased
profitability (Elliott & Elliott, 2015). The
corporation struggled to keep track of its
expenses and appropriately calculate its
income. To address this, a monthly budget
was established beginning in September
2023. Budgeting is a method of financial
management that entails forecasting and
planning for future income and expenses.
By developing a budget, the organization
can set revenue and spending targets, giving
a baseline for analyzing actual performance
(Weygandt et al., 2018).
Despite meeting its purchasing and
spending targets, the company fell short of
its sales projections. To solve this issue, the
corporation created a strategy based on the
preceding three months' average revenues
and expenses. This strategy targeted to
reduce expenses and income in order to
align them with current sales performance
(Horngren, 1978). To enhance sales
performance even further, the firm chose to
focus on actual sales numbers and set a
sales rise target of 20% for the next month
of December 2023. This method highlights
the necessity of defining clear sales goals
and working hard to achieve them
(Horngren, 2009; Maspul, 2024).
In summary, financial analysis and
management techniques play vital roles in
addressing sales performance challenges.
Through the analysis of purchase records,
ratio analysis, and cost control measures,
the accountant identified overpriced bills
and implemented cost reduction strategies.
Budgeting provided a framework for
monitoring expenses and assessing income.
The company then adjusted its strategy
based on actual sales figures and set
specific sales targets to improve
performance.
53
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
Enhancing
SME
Principal Theories
Solutions
Sustainability:
and Innovative
Inventory
Management:
The
Economic Order Quantity (EOQ) model is
a fundamental theory that can be applied to
inventory management. By balancing
inventory holding costs and ordering
expenses, EOQ assists in determining the
ideal order quantity. SMEs can reduce
inventory carrying costs and the risk of
stockouts or overstocking by calculating the
EOQ (Harris, 1990). Furthermore, Just-inTime (JIT) procedures can be used to
optimize inventory levels. JIT focuses on
keeping inventory levels low by relying on
effective supplier relationships, streamlined
production processes, and on-time delivery
systems (Maspul, 2024; Ohno, 2019). This
method lowers inventory holding costs
while increasing cash flow.
Expense Control: Zero-Based
Budgeting (ZBB) is a fundamental
principle that can be used to control
expenses. Starting from zero, ZBB
demands a thorough examination of each
expense item to verify that it matches with
the business's goals and priorities
(Wildavsky, 1986). SMEs can detect
superfluous or redundant expenses and
manage resources more effectively by
utilizing ZBB. Another tool for controlling
expenses is variance analysis. It entails
comparing actual spending to projected
amounts and assessing notable variances.
This study aids in the identification of costcutting
opportunities
and
the
implementation of timely remedial actions
(Horngren, 2009; Maspul, 2024).
Financial Analysis: A key theory in
financial analysis is ratio analysis. It entails
computing and evaluating several statistics
in order to evaluate a company's liquidity,
profitability, and solvency. Liquidity ratios
(e.g., current ratio, quick ratio), profitability
ratios (e.g., gross profit margin, net profit
margin), and solvency ratios (e.g., debt-toequity ratio, interest coverage ratio) are
examples of common ratios (Gibson, 2012).
SMEs can acquire insights into their
financial health, identify strengths and
weaknesses, and make informed decisions
to improve performance by doing ratio
analysis. Furthermore, financial analysis
solutions that enable real-time access to
financial data, automated report generation,
and advanced analytics capabilities can
improve financial analysis.
Customer
Relationship
Management (CRM) is a fundamental
notion that can be used to improve sales
effectiveness. CRM systems help small and
medium-sized businesses (SMEs) to
manage customer interactions, track sales
activities, and analyze customer data in
order to increase customer satisfaction and
drive sales growth (Maspul, 2023; Payne &
Frow, 2005). AI-powered sales analytics
may improve sales performance even
further by analyzing customer data, sales
patterns, and market dynamics with
machine learning algorithms. This analysis
aids in the identification of possible leads,
the optimization of pricing approaches, and
the provision of individualized sales advice
(Davenport et al., 2010). Integrating CRM
systems with sales automation technologies
and predictive analytics can also help to
automate repetitive sales operations and
increase sales forecasting accuracy.
Moreover,
implementing
fundamental ideas and completing analyses
in inventory management, expense control,
financial analysis, and sales performance
54
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
can assist SMEs in optimizing their
operations and making informed decisions.
Inventory management can benefit from the
Economic Order Quantity (EOQ) model
and Just-in-Time (JIT) methods, while
spending control can benefit from ZeroBased Budgeting (ZBB) and variance
analysis. For financial analysis, ratio
analysis is useful, and Customer
Relationship Management (CRM) paired
with AI-powered sales analytics can
improve sales performance.
obstacles and attaining long-term growth.
Furthermore, study on the impact of
emerging technologies such as artificial
intelligence and blockchain on accounting
processes could provide useful insights into
the future trajectory of financial
management practices. Companies that
embrace continual learning and adaptation
can position themselves for success in
today's more competitive and dynamic
business climate.
CONCLUSION
REFERENCES
The Perfect Zone case study
highlights the importance of sound
accounting methods and financial analysis
in corporate management. The accountant
played a critical part in improving the
company's financial health and decisionmaking processes by meticulously
managing inventory, capturing financial
data, strategic planning, and assessing sales
success. These findings highlight the
importance of continuous financial
planning, monitoring, and adaptation in
promoting
long-term
growth
and
profitability. Companies that integrate
accounting
theory
with
practical
applications can improve their financial
performance and traverse the intricacies of
the flower business more successfully.
Akrem, A. M., & Maspul, K. A. (2024).
Excel as a Sustainable Accounting
Solution for SMEs: A Case Study of
Bash Coffee Buraydah. MAREkonomi:
Jurnal
Manajemen,
Akuntansi Dan Rumpun Ilmu
Ekonomi, 2(2), 101–108.
Moving forward, firms must
prioritize
continual
investment
in
accounting
skills
and
technology
infrastructure in order to stay nimble and
responsive to changing market conditions.
Future research might look deeper into the
specific challenges and opportunities that
SMEs like Perfect Zone encounter when
implementing and optimizing accounting
processes, as well as investigate novel
techniques for overcoming common
Ameer, R., & Othman, R. (2012).
Sustainability practices and corporate
financial performance: A study based
on the top global corporations. Journal
of Business Ethics, 108, 61–79.
Collier, P. M. (2015). Accounting for
managers: Interpreting accounting
information for decision making. John
Wiley & Sons.
Davenport, T. H., Harris, J. G., & Morison,
R. (2010). Analytics at work: Smarter
decisions, better results. Harvard
Business Press.
Elliott, B., & Elliott, J. (2015). Financial
accounting and reporting. Pearson
Education UK.
Gibson, C. H. (2012). Financial reporting
and analysis. Cengage Learning.
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Financial Analysis: A Case Study in Perfect Zone Buraidah
Harris, F. W. (1990). How many parts to
make at once. Operations Research,
38(6), 947–950.
Horngren, C. T. (1978). Introduction to
management accounting. Prentice
Hall.
Horngren, C. T. (2009). Cost accounting: A
managerial emphasis, 13/e. Pearson
Education India.
Weygandt, J. J., Kimmel, P. D., Kieso, D.
E., & Aly, I. M. (2018). Managerial
accounting: Tools for business
decision-making. John Wiley & Sons.
Wildavsky, A. B. (1986). Budgeting: a
comparative theory of the budgeting
process. Transaction Publishers.
Kimmel, P. D., Weygandt, J. J., & Kieso,
D. E. (2018). Accounting: Tools for
business decision making. John Wiley
& Sons.
Maspul, K. A. (2023). Monsha’at Sharia
Financing for Saudi Arabia’s SMEs: A
Case Study of Buraydah Specialty
Coffee. Talaa: Journal of Islamic
Finance, 3(2), 104–120.
Maspul, K. A. (2024). Starbucks and
MENA’s Geopolitical Challenges:
Prioritizing Resilience and Employee
Well-being.
Zenodo,
Article
10801792.
Ohno, T. (2019). Toyota production
system:
beyond
large-scale
production. Productivity press.
Payne, A., & Frow, P. (2005). A strategic
framework for customer relationship
management. Journal of Marketing,
69(4), 167–176.
Richards,
G.
(2017).
Warehouse
management: a complete guide to
improving efficiency and minimizing
costs in the modern warehouse. Kogan
Page Publishers.
Warren, C. S., Jones, J. P., & Tayler, W. B.
(2020). Financial and managerial
accounting. Cengage Learning, Inc.
56
JURILMA: Jurnal Ilmu Manajemen Indonesia
Volume. 1 No. 1 (2024): Juni, Halaman 49 -Halaman 56.
E- ISSN:XXXX-XXXX (Online), DOI: …..
https://ejournal.rizaniamedia.com/index.php/jurilma
Exploring the Role of Accounting Practices and Financial
Analysis: A Case Study in Perfect Zone Buraidah
Kurniawan Arif Maspul*1, Ahmed Mohammed Akrem2
University of the People, California US1
Hope University College, Addis Ababa Ethiopia2
Email : kurniawanarifmaspul@my.uopeople.edu1
Email : ahmad@perfectzone.co 2
*Email Correspondence: kurniawanarifmaspul@my.uopeople.edu
ABSTRACT
This compelling case study delves into the critical role of accounting techniques and financial analysis in business
management. The study explores the obstacles faced and the approaches used to overcome them by drawing on
the firsthand experiences of an accountant at a startup business. Through the exploratory qualitative analyses, the
study emphasizes the importance of precise inventory management, budgeting and forecasting, financial
monitoring, and sales performance analysis in attaining long-term growth and profitability. The findings
emphasize the significance of combining accounting theories and practices in order to make informed decisions
and achieve financial success. The study continues by underlining the importance of continuous financial planning
and adaption in order to support long-term corporate growth.
Kata kunci: Accounting; Inventory management; Budgeting and forecasting; Financial monitoring; Sales
performance analysis
INTRODUCTION
Accounting
techniques
and
financial analysis are critical to the
performance and sustainability of firms
across a wide range of industries. These
practices provide important insights into a
company's financial health, aid in decisionmaking, and contribute to long-term growth
and profitability (Ameer & Othman, 2012;
Collier, 2015). This article gives a complete
case study that investigates the experiences
of an accountant who has been working at a
new business for one year. The study's goal
is to look at the issues that accountants face,
as well as the accounting theories and
techniques that are used to overcome them.
The study intends to provide significant
insights into the significance of accounting
methods in financial management by
investigating these factors.
Perfect Zone is a new enterprise in
Buraydah that specializes in the sale of
fresh flowers, but it represents a small and
relatively unknown SME in need of
attention. Despite its potential to boost the
local economy and sustain a shift in the
flower sales industry, which has grown in
importance as Al Qassim people adopt new
cultural
norms such as sending
congratulations messages and more.
Accountants play a critical role in this
initiative beyond simply being accountable;
they also manage and control operations
within this fledgling corporation, reporting
directly to the CEO.
While the background introduces
Perfect Zone as a new player in Buraydah's
flower industry, there is a noticeable lack of
urgency over the chosen issue. Delving
49
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
deeper into the phenomenon of blooming
SMEs such as Perfect Zone, as well as the
hurdles they face in establishing themselves
within the startup environment, will help to
strengthen the story. The necessity of good
accounting methods in overcoming
common startup challenges, such as limited
resources,
tough
competition,
and
navigating regulatory frameworks, is
highlighted. Furthermore, giving case
studies or real-life examples of how these
obstacles directly affect accounting
operations within companies will provide
significant insights into the importance of
addressing these issues early on.
Meanwhile, as accountants must
gain a thorough understanding of a
company's organizational efficiency and
financial position. This knowledge serves
as the foundation for owners' and
stakeholders' decision-making (Elliott &
Elliott, 2015). Accountants can discover
opportunities for development, make
educated decisions, and promote financial
stability by reviewing the entire
performance of the organization. Accurate
inventory management is critical to
guaranteeing corporate cost sustainability.
Companies can control expenses, reduce
wasteful inventories, and optimize resource
allocation by employing effective tracking
systems (Richards, 2017; Warren et al.,
2020). Inefficient inventory management
can result in increased expenses and
financial inefficiencies, emphasizing the
importance of accountants establishing
strong inventory management processes.
Budgeting and forecasting are
critical components of financial planning
and decision-making. Businesses can
manage resources more efficiently and
anticipate financial demands by developing
comprehensive budgets that account for
future purchases and expenses (Weygandt
et al., 2018). Accountants can use this
approach to establish a clear financial
roadmap, ensuring that the business runs
within its limits and meets its financial
objectives.
Similarly,
firms
face
considerable hurdles in tracking spending
and accurately estimating income.
Financial analysis and decision-making
processes can be hampered by inaccurate
financial data and the absence of effective
expense monitoring tools. Accountants
must address these issues by developing
effective financial monitoring techniques,
assuring accurate financial reporting, and
delivering reliable data for decision-making
(Kimmel et al., 2018).
Financial analysis is critical in
assessing sales performance and overall
business success. Accountants obtain
significant insights into the effectiveness of
sales strategies, revenue production, and
opportunities
for
development
by
evaluating sales numbers. This research
enables firms to make data-driven
decisions, improve sales performance, and
meet profit targets (Horngren, 1978). The
relevance of competent accounting
processes and financial analysis in
corporate management is highlighted in this
case study. Accountants may greatly help to
a company's financial success by
recognizing organizational efficiency,
adopting precise inventory management,
conducting budgeting and forecasting,
monitoring spending, and reviewing sales
performance. Accounting theories and
practices are important in allowing
informed decision-making, guaranteeing
cost
sustainability,
and
achieving
profitability, according to the findings.
Businesses can handle problems and seek
50
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
for long-term growth and success by
constantly analyzing and revising financial
strategy.
inventory management, cost sustainability,
budgeting, and forecasting for future
purchases and expenses.
METHOD
Challenges and Initial Assessment
To provide a nuanced qualitative
analysis of inventory management and sales
performance at Perfect Zone, a prominent
flower shop in Buraidah, Saudi Arabia.
This case study employs a rigorous
methodology that integrates firsthand
experience observation, a comprehensive
practice report, and an extensive literature
review. The author obtained firsthand
insight into the issues faced and watched
the implementation of several techniques
through direct involvement in the shop's
operations. A full practice report was
created, describing the precise approaches
used, how they were implemented, and the
results obtained. The study also used
scholarly literature to contextualize the
findings and compare them to existing ideas
and best practices. This methodology
provides a compelling and thorough
assessment of Perfect Zone's inventory
management and sales performance by
smoothly merging these parts, offering
useful insights to both academic study and
practical implementations.
Several obstacles may develop
while beginning a new career as an
accountant, necessitating an awareness of
the entire functioning of the organization.
Key considerations to consider include:
how well-organized is the business? Is there
any outstanding debt, and if so, is it being
paid? What was the company's profitability
in the previous year? These questions are
important markers for assessing the
company's performance and financial
standing (Horngren, 1978). The accountant
found issues that needed repair shortly after
starting work. Asset depreciation was not
accurately reported, subscriptions were
only partially accounted for, and inventory
items were not included in the financial
statements. To ensure accurate financial
reporting and decision-making, these
difficulties had to be resolved (Akrem &
Maspul, 2024; Kimmel et al., 2018).
RESULT AND DISCUSSION
An accountant's position in any
business establishment is crucial in
knowing the organization's financial health
and providing a framework for decisionmaking by owners and stakeholders (Elliott
& Elliott, 2015). This article gives a case
study of an accountant who has been
working for a year in a new business,
highlighting the issues encountered as well
as the accounting theories and techniques
used to address them. The emphasis is on
To address these issues and enhance
accounting methods, the accountant applied
a number of financial and management
theories. The notion of Generally Accepted
Accounting Principles (GAAP) is one such
theory, which provides a framework for
uniform and transparent financial reporting
(Elliott & Elliott, 2015). The accountant
ensured that the financial statements
appropriately reflected the business's
financial status and performance by
complying to GAAP. The Matching
Principle, which stipulates that expenses
should be recognized in the same period as
revenues, is another relevant idea
(Weygandt et al., 2018). The accountant
used the Matching Principle by
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Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
appropriately
recording
depreciation
charges and accounting for subscriptions,
aligning expenses with the related revenuegenerating activities.
To
solve
inventory-related
concerns, the accountant additionally
applied Inventory Management theory.
This theory highlights the significance of
effectively managing and valuing inventory
in order to achieve optimal resource
allocation and cost control (Warren et al.,
2020). The accountant improved the
accuracy of the financial statements and
promoted informed decision-making by
establishing
excellent
inventory
management techniques such as regular
physical counts and using appropriate
costing methodologies.
Financial analysis theories were
also useful in addressing the accountant's
problems. Ratio analysis, for example,
aided in assessing the company's liquidity,
profitability, and solvency by examining
important financial ratios (Horngren,
1978). This research gave insight into the
company's financial health and revealed
areas that needed to be addressed, such as
enhancing liquidity or reducing debt. To
address the demand for reliable financial
planning, the accountant applied Budgeting
and Forecasting theory. The accountant
forecasted future expenses, revenues, and
cash flows by developing comprehensive
budgets and financial forecasts, allowing
for optimal resource allocation and
informed decision-making (Horngren,
2009; Weygandt et al., 2018).
Inventory Management and Expense
Control
To
address
the
management problem, the
inventory
accountant
prioritized the implementation of an
effective inventory tracking system.
Employees purchased additional products
from outside stores due to a lack of efficient
inventory tracking, resulting in increased
inventory and excessive expenses. The
accountant was able to streamline the
purchasing process and cut expenses by
developing a strong system (Warren et al.,
2020). The use of numerous financial and
management theories is required for
effective inventory management. The
Economic Order Quantity (EOQ) model is
one such theory that helps calculate the
ideal order quantity that minimizes
inventory carrying costs and ordering
expenses (Horngren, 1978). The accountant
optimized inventory levels and decreased
the risk of stockouts or overstocking by
calculating the EOQ and determining
suitable reorder points.
The accountant also used the Justin-Time (JIT) inventory management
principle. JIT prioritizes inventory
reduction by obtaining goods from
suppliers just in time for production or
customer demand (Elliott & Elliott, 2015).
The accountant reduced inventory holding
costs and improved cash flow by employing
JIT methods such as keeping good
connections with suppliers and utilizing
efficient delivery systems. Another critical
area handled by the accountant was expense
control. The accountant developed a
detailed budget for the following three
months, including all necessary payments,
by meticulously noting all subscriptions.
This enabled better financial planning and
resource allocation (Weygandt et al., 2018).
In this context, the concept of ZeroBased Budgeting (ZBB) is relevant. Rather
of depending on historical spending trends,
52
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
ZBB requires a rationale for every expense,
starting with zero (Kimmel et al., 2018).
Using ZBB, the accountant scrutinized each
subscription and its cost, verifying that
spending were in line with the company's
goals and priorities. A crucial component of
management accounting, variance analysis,
was also used to monitor and control
spending. The accountant noticed any
substantial variances and analyzed the
underlying causes by comparing actual
expenses to projected levels (Horngren,
1978). This analysis enabled early remedial
steps to be made, ensuring that costs were
kept under control.
Financial
Analysis
Performance
and
Sales
During the purchase record review,
the accountant discovered inflated bills that
went unreported by store staff. The
company was able to reduce costs and boost
profitability by resolving this issue (Elliott
& Elliott, 2015). Financial analysis is
critical in assessing a company's
performance and determining areas for
development. Ratio analysis is a common
tool in financial analysis. Ratio analysis is
the process of computing and analyzing
numerous financial ratios in order to
evaluate
a
company's
liquidity,
profitability, and solvency (Horngren,
1978). Through ratio analysis, the
accountant was able to detect inflated bills,
which had a detrimental impact on the
company's profitability.
Aside from ratio analysis, the
concept of cost control is critical for
increasing profitability. Cost control is the
management and reduction of expenses in
order to improve a company's financial
performance. The accountant efficiently
adopted cost control methods by detecting
and correcting the overcharged bills,
resulting in lower costs and increased
profitability (Elliott & Elliott, 2015). The
corporation struggled to keep track of its
expenses and appropriately calculate its
income. To address this, a monthly budget
was established beginning in September
2023. Budgeting is a method of financial
management that entails forecasting and
planning for future income and expenses.
By developing a budget, the organization
can set revenue and spending targets, giving
a baseline for analyzing actual performance
(Weygandt et al., 2018).
Despite meeting its purchasing and
spending targets, the company fell short of
its sales projections. To solve this issue, the
corporation created a strategy based on the
preceding three months' average revenues
and expenses. This strategy targeted to
reduce expenses and income in order to
align them with current sales performance
(Horngren, 1978). To enhance sales
performance even further, the firm chose to
focus on actual sales numbers and set a
sales rise target of 20% for the next month
of December 2023. This method highlights
the necessity of defining clear sales goals
and working hard to achieve them
(Horngren, 2009; Maspul, 2024).
In summary, financial analysis and
management techniques play vital roles in
addressing sales performance challenges.
Through the analysis of purchase records,
ratio analysis, and cost control measures,
the accountant identified overpriced bills
and implemented cost reduction strategies.
Budgeting provided a framework for
monitoring expenses and assessing income.
The company then adjusted its strategy
based on actual sales figures and set
53
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
specific sales
performance.
targets
Enhancing
SME
Principal Theories
Solutions
to
improve
Sustainability:
and Innovative
Inventory
Management:
The
Economic Order Quantity (EOQ) model is
a fundamental theory that can be applied to
inventory management. By balancing
inventory holding costs and ordering
expenses, EOQ assists in determining the
ideal order quantity. SMEs can reduce
inventory carrying costs and the risk of
stockouts or overstocking by calculating the
EOQ (Harris, 1990). Furthermore, Just-inTime (JIT) procedures can be used to
optimize inventory levels. JIT focuses on
keeping inventory levels low by relying on
effective supplier relationships, streamlined
production processes, and on-time delivery
systems (Maspul, 2024; Ohno, 2019). This
method lowers inventory holding costs
while increasing cash flow.
Expense Control: Zero-Based
Budgeting (ZBB) is a fundamental
principle that can be used to control
expenses. Starting from zero, ZBB
demands a thorough examination of each
expense item to verify that it matches with
the business's goals and priorities
(Wildavsky, 1986). SMEs can detect
superfluous or redundant expenses and
manage resources more effectively by
utilizing ZBB. Another tool for controlling
expenses is variance analysis. It entails
comparing actual spending to projected
amounts and assessing notable variances.
This study aids in the identification of costcutting
opportunities
and
the
implementation of timely remedial actions
(Horngren, 2009; Maspul, 2024).
Financial Analysis: A key theory in
financial analysis is ratio analysis. It entails
computing and evaluating several statistics
in order to evaluate a company's liquidity,
profitability, and solvency. Liquidity ratios
(e.g., current ratio, quick ratio), profitability
ratios (e.g., gross profit margin, net profit
margin), and solvency ratios (e.g., debt-toequity ratio, interest coverage ratio) are
examples of common ratios (Gibson, 2012).
SMEs can acquire insights into their
financial health, identify strengths and
weaknesses, and make informed decisions
to improve performance by doing ratio
analysis. Furthermore, financial analysis
solutions that enable real-time access to
financial data, automated report generation,
and advanced analytics capabilities can
improve financial analysis.
Customer
Relationship
Management (CRM) is a fundamental
notion that can be used to improve sales
effectiveness. CRM systems help small and
medium-sized businesses (SMEs) to
manage customer interactions, track sales
activities, and analyze customer data in
order to increase customer satisfaction and
drive sales growth (Maspul, 2023; Payne &
Frow, 2005). AI-powered sales analytics
may improve sales performance even
further by analyzing customer data, sales
patterns, and market dynamics with
machine learning algorithms. This analysis
aids in the identification of possible leads,
the optimization of pricing approaches, and
the provision of individualized sales advice
(Davenport et al., 2010). Integrating CRM
systems with sales automation technologies
and predictive analytics can also help to
automate repetitive sales operations and
increase sales forecasting accuracy.
54
Kurniawan Arif Maspul, Ahmed Mohammed Akrem, Exploring the Role of Accounting Practices and
Financial Analysis: A Case Study in Perfect Zone Buraidah
Moreover,
implementing
fundamental ideas and completing analyses
in inventory management, expense control,
financial analysis, and sales performance
can assist SMEs in optimizing their
operations and making informed decisions.
Inventory management can benefit from the
Economic Order Quantity (EOQ) model
and Just-in-Time (JIT) methods, while
spending control can benefit from ZeroBased Budgeting (ZBB) and variance
analysis. For financial analysis, ratio
analysis is useful, and Customer
Relationship Management (CRM) paired
with AI-powered sales analytics can
improve sales performance.
SMEs like Perfect Zone encounter when
implementing and optimizing accounting
processes, as well as investigate novel
techniques for overcoming common
obstacles and attaining long-term growth.
Furthermore, study on the impact of
emerging technologies such as artificial
intelligence and blockchain on accounting
processes could provide useful insights into
the future trajectory of financial
management practices. Companies that
embrace continual learning and adaptation
can position themselves for success in
today's more competitive and dynamic
business climate.
CONCLUSION
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The Perfect Zone case study
highlights the importance of sound
accounting methods and financial analysis
in corporate management. The accountant
played a critical part in improving the
company's financial health and decisionmaking processes by meticulously
managing inventory, capturing financial
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