Why Should Organisations Collect
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 flow, production and productivity, solve problems, plan improvements, implement quality control procedures and plan future strategies. They should also understand how financial KPIs and appropriate record keeping systems fit with taxation and other legal requirements and educate the process/ responsibilities to their staff.
What are the reports that can be used for financial planning in an organisation?
Profit and Loss Balance sheet Revenue and Expenditure report Cash flow statement Debtors and Creditors reports
What is the process for preparing budgets or other financial plans?
1. Identify data that needs to be collected. 2. Identify the appropriate sources of data. 3. Ensure currency, reliability and validity of data. 4. Classify and code the data according to accounting and organisational principles. 5. Calculate costs, profit and loss and/or breakeven analysis etc where necessary. 6. Access the results of data analysis and provide formal or informal reports on the outcomes. 7. Keep accurate and secure records of financial transactions.
What two forms of budgeting might be used?
Fixed and Flexible
Which form of budget allows changes to be made?
Flexible
Explain how contingency plans work.
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 flow, production and productivity, solve problems, plan improvements, implement quality control procedures and plan future strategies. They should also understand how financial KPIs and appropriate record keeping systems fit with taxation and other legal requirements and educate the process/ responsibilities to their staff.
What are the reports that can be used for financial planning in an organisation?
Profit and Loss Balance sheet Revenue and Expenditure report Cash flow statement Debtors and Creditors reports
What is the process for preparing budgets or other financial plans?
1. Identify data that needs to be collected. 2. Identify the appropriate sources of data. 3. Ensure currency, reliability and validity of data. 4. Classify and code the data according to accounting and organisational principles. 5. Calculate costs, profit and loss and/or breakeven analysis etc where necessary. 6. Access the results of data analysis and provide formal or informal reports on the outcomes. 7. Keep accurate and secure records of financial transactions.
What two forms of budgeting might be used?
Fixed and Flexible
Which form of budget allows changes to be made?
Flexible
Explain how contingency plans work.