All businesses have obstacles to overcome in the pursuit of success. Small businesses especially must carefully and continuously monitor their financial reports in order to manage effectively and stay viable. The influence of competition in the marketplace creates an environment where managers and business owners must seek out every advantage in order to maintain their competitive edge.   As technology advances, the manager must consider the pros and cons of integrating these advances into their business plan. Additionally, most businesses must look after their own interests as well as those of their employees to maximize their potential.
This paper will address the following: 1) Utilization of budgets and performance reports in the decision-making process.   2) Ethical influence on Guillermo’s accounting decisions.   3)   Relevant accounting information for Guillermo to consider when making financial decisions.
Budgets and Performance in Decision-Making
            While it is essential to know who your competitors are and to stay ahead of the “game”, business owners may prevent themselves from completing their goals and objectives if they center their attention solely on their competition.   Budgets are produced during the planning phase and in turn are used by management to make plans for the next fiscal year.   The appropriate budget performance of a company allows prioritization of short and long term goals and objectives as well as the possible predictions of quarterly profits and or losses.   Actual assets, liabilities, and equity information are clearly indicated on accounting ledgers. Guillermo can go back and review his ledgers to determine exactly where the money is being spent, his actual profit or revenue and what his liabilities are compared to assets and revenue.   This information will allow Guillermo to improve productivity, create operational efficiencies and economies of scale, giving him the ability to create a plan of action for his...