Swift print Ltd

Published: October 28, 2015 Words: 1859

TASK 1.

INTRODUCTION:-

Swift print Ltd is an old well established printing company. It has its head quarters in Harlow, Essex and its printing factory in Leeds. Month end accounts are produced and copied onto a CD and sent it to Leeds for preparing ledger accounts and then again it come back to Harlow by taxi full of 3 boxes of paper. Then it is distributed to departmental managers to produce a summary of their activity for the month. This process of sending CD to Leeds and producing summaries take at least 5 days.

As the new financial controller for Swift Print Ltd:-

(a) Present Procedure

Whole procedure takes 5 days to produce a summary.

As a financial controller I found some inefficiencies of the present system are as follows:-

1. Collation of accounts at the end of the month, which can be made online or real time as there is internet facilities, if not then intranet facilities are available in this modern time. From doing this Swift Print can reduce their cost as well.

2. Sending across the captured accounting details via a CD to Printing Station, which can be transmitted by faxing, or scanning mechanism, etc.

3. The department managers produce the accounts summary sheet after receiving the printed copies from Leeds, which can be rather produced based on the cost codes they have used while capturing the accounting details itself as an end of day process

4. The entire accounting business process is paper based, which can be made purely online/offline in soft form that will eventually make the entire accounting practice paperless thus saving trees.

(b) KEY INDICATORS OF THE PERFORMANCE:-

Key performance indicators are the key element for organization to achieve its goals.

As far as the key performance indicators are concerned some the identified indicators can be:

• Raw Material Usage & Wastage:-

here Swift Print Ltd are wasting their resources like petrol, time, days of production, by sending accounts from headquarters to the printing factory.

• Production Statistics :-

Swift print Ltd has to focus on time and resource that is personnel's and re-materialization of materials.

• Accounting Practices:-

taking too much time to produce a final month summary, instead they have to keep their book-keeping in one place rather than passing it to different departments of the firm.

(c) FINANCIAL CONTROL PROCEDURES:-

Financial control is done to prevent the errors in a financial transactions.

Control procedure help an organization to achieve its objectives.

Individual or a part within the financial system performs the control procedure.

Effective control procedures is possible only when, the work duties are separated between employees performing different control practices.

 There are 2 key stages of financial control procedure.:-

1. Manual transaction control

2. Automated transaction control.

1. Manual transaction control:-

This is further divide into 5 types:-

a) Review of transaction:-

this includes, the review of expenses transferred, acceptance of award contract, approval of recharge, approval of whole financial information and payroll system.

b) Verification of receipt:- reviewing and appraising the report which is received.

c) Post-transaction review:- reviewing the ledger accounts, reports of card transaction, reports of payroll expenses.

d) Balance reconciliation:- reconcile monthly summarized accounts to know debtor's account balances. Also reconcile monthly petty cash accounts.

e) Balance analysis:- reviewing the expenses incurred due to the fluctuation in balances over the whole year.

2. Automated transaction control:-

This is further divided into 4 types:-

a) System accessing function:- access the requirement of the password of financial information system.

b) Data input:- check and format the data or telephone numbers.

c) Data validation:- to validate the fund, and account code of organization.

d) Data processing:- summarize and post automatically through system the invoice payment in ledger accounts.

 CONCLUSION:-

Thus, if the Swift Print Ltd follow the above financial and control procedures to ensure the accuracy of the system.

http://financial.ucsc.edu/Pages/Management_FinancialControls.aspxdepartment and get in the details right from raising the procurement of raw materials Receiving the materials

Arranging the raw materials for Production line

Produced Finished Products

Wastage eliminated

In each of these processes you can use the mentioned data like average procurement time, receiving time, production time, wastages for various production carried for the entire month and so on…

7 stakeholders Getting information about profit & loss of company

P2-1

There are two types of users( internal and external):- list of internal users:-

1. employees

2. management

3. shareholders/owners.

list of external users :-

those who have economic transactions like

• suppliers

• creditors

• bankers

• financial institutions

others like

• competitors

• government and regulatory agencies

• auditors

• researchers and academicians

• representatives of others interest like brokers ,underwriters etc

• potential shareholders

Task2;-

Following are the limitations:

Financial accounting permits alternative treatments. Accounting is based on concepts and it follows “generally accepted principles". But there exist more than one principle for the treatment of any one item. This permits alternative treatments with in the framework of generally accepted principles. For example, the closing stock of a business may be valued by anyone of the following methods: FIFO (First-in- First-out), LIFO (Last-in-First-out), Average Price, Standard Price etc., but the results are not comparable.

Financial accounting does not provide timely information

It is not a limitation when high powered software application like HiTech Financial Accenting are used to keep online and concurrent accounts where the balance sheet is made available almost instantaneously. However, manual accounting does have this shortcoming.

Financial accounting is designed to supply information in the form of statements (Balance Sheet and Profit and Loss Account) for a period normally one year. So the information is, at best, of historical interest and only 'post-mortem' analysis of the past can be conducted. The business requires timely information at frequent intervals to enable the management to plan and take corrective action. For example, if a business has budgeted that during the current year sales should be $ 12,00,000 then it requires information whether the sales in the first month of the year amounted to $ 10,00,000 or less or more?

Traditionally, financial accounting is not supposed to supply information at shorter interval less than one year. With the advent of computerized accounting now a software like HiTech Financial Accounting displays monthly profit and loss account and balance sheet to overcome this limitation. Financial accounting is influenced by personal judgments'Convention of objectivity' is respected in accounting but to record certain events estimates have to be made which requires personal judgment. It is very difficult to expect accuracy in future estimates and objectivity suffers. For example, in order to determine the amount of depreciation to be charged every year for the use of fixed asset it is required estimation and the income disclosed by accounting is not authoritative but 'approximation'.

Financial accounting ignores important non-monetary information

Financial accounting does not consider those transactions of non- monetary in nature. For example, extent of competition faced by the business, technical innovations possessed by the business, loyalty and efficiency of the employees; changes in the value of money etc. are the important matters in which management of the business is highly interested but accounting is not tailored to take note of such matters. Thus any user of financial information is, naturally, deprived of vital information which is of non-monetary character. In modern times a good accounting software with MIS and CRM can be most useful to overcome this limitation partially.

Financial Accounting does not provide detailed analysis

The information supplied by the financial accounting is in reality aggregates of the financial transactions during the course of the year. Of course, it enables to study the overall results of the business the information is required regarding the cost, revenue and profit of each product but financial accounting does not provide such detailed information product- wise. For example, if business has earned a total profit of say, $ 5,00,000 during the accounting year and it sells three products namely petrol. diesel and mobile oil and wants to know profit earned by each product Financial accounting is not likely to help him unless he uses a computerized accounting system capable of handling such complex queries. Many reports in a computer accounting software like HiTech Financial Accounting which are explained with graphs and customized reports as per need of the business overcome this limitation.

Financial Accounting does not disclose the present value of the business

In financial accounting the position of the business as on a particular date is shown by a statement known as 'Balance Sheet'. In Balance Sheet the assets are shown on the basis of "Continuing Entity Concept. Thus it is presumed that business has relatively longer life and will continue to exist indefinitely, hence the asset values are 'going concern values.' The 'realized value' of each asset if sold to-day can't be known by studying the balance sheet.

Tadk 3-

See pdf

Task4.

Non-financial measures offer four clear advantages over measurement systems based on financial data.

1. it's a closer link to long-term organizational strategies.

Financial evaluation system focus on the annual or short term performance against accounting yardstick.they don't deal with pogress related to customers requirement

Or competitor.nor other financial objectives like profitability , competitive strategy

2.critics of traditional measure argue that drives

. critics of traditional measures argue that drivers of success in many industries are "intangible assets" such as intellectual capital and customer loyalty, rather than the "hard assets" allowed on to balance sheets. Although it is difficult to quantify intangible assets in financial terms, non-financial data can provide indirect, quantitative indicators of a firm's intangible assets.

3. non-financial measures can be better indicators of future financial performance.

Even when the ultimate goal is maximizing financial performance, current financial measures may not capture long-term benefits from decisions made now. Consider, for example, investments in research and development or customer satisfaction programs. Under U.S. accounting rules, research and development expenditures and marketing costs must be charged for in the period they are incurred, so reducing profits. But successful research improves future profits if it can be brought to market.

Similarly, investments in customer satisfaction can improve subsequent economic performance by increasing revenues and loyalty of existing customers, attracting new customers and reducing transaction costs. Non-financial data can provide the missing link between these beneficial activities and financial results by providing forward-looking information on accounting or stock performance. For example, interim research results or customer indices may offer an indication of future cash flows that would not be captured otherwise.

4. the choice of measures should be based on providing information about managerial actions and the level of "noise" in the measures.

Noise refers to changes in the performance measure that are beyond the control of the manager or organization, ranging from changes in the economy to luck (good or bad). Managers must be aware of how much success is due to their actions or they will not have the signals they need to maximize their effect on performance. Because many non-financial measures are less susceptible to external noise than accounting measures, their use may improve managers' performance by providing more precise evaluation of their actions. This also lowers the risk imposed on managers when determining pay.