Understand Accounting: BWA explained
21 Aug

Understanding accounting: BWA explained

For many managers, the business management report - BWA for short - is either a necessary evil of accounting or sometimes even a bit of a mystery. But especially in business management, it is a great help that can be used very easily with the right system.
 
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What is BWA

The business management evaluation actually only describes the overview of the costs and revenues of a company. This survey is based on data and figures from financial accounting. These are prepared appropriately and evaluated with the help of various key figures. This shows whether and to what extent a company is economically successful and provides information about its liquidity and capital structure.

Benefit of the BWA

The BWA is particularly helpful for company management. With a monthly evaluation, business developments are up-to-date and can be checked in detail. This evaluation of the company data thus becomes the most important form of decision-making basis, as it is based on reliable figures. It is also advantageous to have this overview in credit negotiations, as banks always require it when making credit decisions.

Create BWA

In most cases, the BWA is integrated as a function directly in the accounting system. The standard structure comes from DATEV eG. Tax consultants or accountants, for example, use it. The structure also serves as a template for various accounting programmes. There are also templates for Excel, for example, but these are usually only used for further analyses, for example to check whether the data are correct. There is also an Excel interface in which, as with SAP Business One, the data is imported directly from the system.

In addition to the standard version and the DATEV BWA, there are other formats. For example, the income-expenditure BWA (for freelancers and small businesses), the BWA 02 (for doctors) or the BWA 20 (for craft businesses). There is also a separate form of the BWA for tax consultants and controllers. In addition, it is possible to adapt the respective structure to the company.

Read BWA

The best evaluation functions of a system are of little use if you cannot read them. The pure snapshot of the cost and revenue situation of a company does not provide much relevant information. It is only when questions are specifically formulated and different variables or periods are compared with each other that the information is so clear that it can be used for decision-making. For example, one could ask how the company developed compared to last month and how it developed compared to the previous year. Were planned values undercut or exceeded last month? When else did this happen? etc.

There are already templates for many questions concerning a BWA, such as those of the Federal Ministry for Economic Affairs and Energy. The form shows a template that can be used to draw up monthly or annual comparisons, for example.

These questions are already integrated in systems like SAP Business One. In this way, business analyses and period comparisons are easily queried directly in the system; business units, projects, products, etc. can be evaluated individually and filtered according to certain aspects. The big advantage: in contrast to a "simple" BWA, relevant results can be called up at any time, since the current figures naturally influence the results again and again. Admittedly, it also makes sense for long-term developments to produce an evaluation annually. However, short-term evaluations can have a significant influence on the management of the company. In this way, managers can react in time and take countermeasures or provide support at the appropriate point.

 

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