Owen Lim retired a few years ago at the age of 47, having built up a substantial retirement portfolio through a range of business activities. He moved to Port Douglas in Far North Queensland Australia, to follow his dream of a relaxed life in a coastal tropical climate near the beach and rainforest. However, after a few months, Lim became restless and opened a water sports hire and equipment store. The single store soon grew into a chain of four outlets spread from Port Douglas, Cairns, The Whitsundays, to Noosa. As Lim put it, 'I can't believe how fast we've expanded. It's basically been unrestrained growth - growth that has occurred despite what we've done'

Although business appeared profitable, the chain did have its share of problems. Water sport sales tended to be seasonal, with a significant slowdown once the dry season finished, which could play havoc with the bank account. Muller therefore added fishing and hunting equipment to his product line. Also, the need to build up required inventories was a strain and left cash balances at very low levels, occasionally giving rise to the need to speak with his bank manager about short-term bank loans to tide the business over.

Lim further expanded the business to include big game fishing trips for beginners, which was promoted through social media, local fishing clubs and included equipment hire and boat charter. Reports from the company's financial accounting system seemed to indicate that this part of the business was losing money because of high and increasing costs, but Lim could not be certain. 'The profit or loss statement prepared by our CPA firm is not too useful in assessing the problem", he noted. 'Also, my gut feeling is that for the business overall we are not dealing with the best suppliers in terms of quality, delivery reliability and prices'. 'I feel like we are kinda flying blind about costs and how the business is really performing'. Additional complications were caused by an increasingly competitive marketplace, with many former customers now buying equipment online.

Lim was not sure what to do. The CPA accounting firm, SlickSmartAccountants (SSA,) that Lim uses was very good at preparing financial statements and tax returns, but he did wonder if they really understood the way the business operated.

Required:

a) Reflecting on your LB5237 studies and the business management issues outlined above, advise on the types of managerial accounting information that Lim may require to run his business more effectively. Ensure your answers are specific to Lim's business and use examples.

b) Lim asks SSA to help in gathering and analysing suitable information to run his business better. But the managing partner responds: 'you must be joking - we provide accounting services. The only role of accountants is to do financial statements and tax returns, such as GST and income tax!'. Do you agree with this statement? Discuss and explain.