manage budgets and financial plans

Topics: Income statement, Balance sheet, Financial statements Pages: 17 (5086 words) Published: October 30, 2013
ASSESSMENT ACTIVITY 1.

It is crucial for any business organisation to collect, file and maintain accurate financial records. Without the correct financial details in order a business would be working blind and therefore could not suitably deal with future plans and orders if they do not know actually how much is needed to keep the business running appropriately.

A lack of updated and in-depth financial records are said to be one of the fundamental factors of why many small businesses fail. A recent survey of accounting firms reported over 50% of the accountants surveyed rated their small business clients accounting records as average, inadequate or non-existent.

There are some very important reasons why it is vital for a business to keep their financial records up to date. Firstly it will enable them to understand their tax position also it is crucial in being able to track who owes money to the business and when and where money goes on a day-by-day and week-by-week basis.

Also if a business wishes to extend financial records to include a cash flow projection, they will then also understand the need for cash in the weeks and months ahead. Unfortunately accounting and business record keeping can often be treated by small business owners as something they do only because they have to, especially as it takes up time. This mindset is not surprising when you consider the many time demands facing the small business owner today.

However, the time is worth spending on keeping accurate, timely and up-to-date financial records as a matter of normal business process when you consider how financial visibility aids in the success of many businesses.

If the small business owner is time poor, it would be worthwhile them employing a professional bookkeeper to look after their financial records and keep the books up to date, allowing the owner to keep the business on track and moving forward.

The answer to this is so simple: Research! You can never do too much research, if you're doing it properly. It is pointless to just go online and print off everything you can possibly find on the area that you're interested in but, if you look for the information in a calm, patient manner than you will find a lot more than just wasted sheets of A4 paper.

Make sure you look for keywords in information by pressing Control + F on your keyboard when reading an article or scanning a webpage for information. This way you can cut out all of the information that you don't need which will save you time and effort. The longer you sit researching for, the less helpful the research will be that you find, because you will undoubtedly get bored, meaning the work will be less worthwhile.

Key tips to consider when researching:

• Take notes down as you're reading the information which you can read back and work from when you have finished your research. These notes will be personal to you and based on things that you can understand and share with other people, instead of a ton of waffle that you've downloaded off the Internet. • Again, don't just print out everything you can find on the topic; be selective with your finds. Make sure that you don't just overload yourself with information as it won't be retained, meaning that your efforts will just go to waste.

Research for team work when making plans is essential, you need to know what to do, who's going to do it and look at the competition to see how they do it too. You can always learn from the actions of successful companies and other teams, leading to you being able to incorporate it into your own work.

Operational efficiency deals with minimization of waste and maximization of resource capabilities, in order to deliver quality products and services to customers. Operational efficiency is concerned with identifying wasteful processes and resources that drain the organization's profits. Operational efficiency is also concerned with designing new work...
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