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Why Should Organisations Collect

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Why should organisations collect, file and maintain accurate financial records? To have a record of how the business is running. This allows us to determine how the business is sitting financially and display what money is going where and whether there is room for improvement. Basically, it is used to anaylse the business as a whole and to determine performance for both employees and for the organisation. What are the expectations of managers and supervisors in relation to budget or financial plans? Managers and supervisors should understand financial information relating to costs, operations, assets, credit analysis, GST transactions, inventory management, invoices and accounts, ect. This will allow them to monitor and control cash …show more content…

It's also important to understand when these transactions are taking place. There is the chance that a customer has bought an item but takes a long time in paying it off. Although you might have made a profit on the sale of the item, there is a cash flow gap as you have not yet received the funds to pay for the item yourself. Simple things like can put smaller businesses in a lot of financial trouble. This cash flow gap could damage credit ratings, miss other opportunities, and force the borrowing of funds. What data do you need to collect, and from whom, in order to construct a cash flow budget? Sales reports - last periods figures Outgoings such as purchases, marketing, loan repayments, etc Staff costs Capital such as stock on hand and cash Describe how the budget is used to monitor work, performance, variation, and team/ division outputs. The budget reports are designed to give a clear overview of how the business is running. Every expense can be calculated as a percentage of the total expense/margin to see if it is cost effective. If it is being overspent then something needs to be done. This could be a number of things such as reducing spending, reducing or increasing staff levels, cross-training staff, incorporate techniques to increase sales, reduce stock levels, outsourcing, and renegotiating supplier costs. Why do you think it is necessary to report on these things? - For the

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