Keeping Cash Book, Purchase Invoice, Ten Reasons for Keeping Records, Four Types of Budgets - Assignment Example

LESSON 6 – ASSIGNMENT 1. We should keep the cash book so that we can record all the expenses. By those transactions we will know the pattern of househlod spending. This helps me to ascertain ways to reduce expenses and areas where it is imperative to spend. It guides the future strategy to be followed and plan for the income accordingly. 2. The ten reasons for keeping records are as follows- To ascertain profit or loss in the business To ensure changes in the planning process To control the costs of goods and services To identify the amount due from debtors To see which accounts is necessary to be paid To ensure business success To make insurance claim To decide future strategy for business To meet tax requirements Identifying the equipments to be purchased 3. It is imperative to keep the below mentioned report Simple cash book Cheque book Bank statement Debtors’ unpaid invoices. Creditors’ unpaid invoices. Balance sheet Income Statement 4. Profit is the difference between revenues and expenses. It is calculated as Revenues – Expenses. 5. Assets: is defined as the items which are owned by the bussiness and helps to generate future income. Example plant & machinery Liabilities: is defined as the sum of money which is owed by the business to outsiders Examples short term loan Proprietorship: is defined as business which is owned and controlled by the individual. All the investment is generated by the owner and the company doesn’t look towards raising money from the public through shares. 6. Balance Sheet: is financial statement which represents the value of assets and liabilities on a particular date. Profit & Loss Statemnt: is a statement which describes all business transaction incurred in a financial year and helps to calculate the profit or loss that the business incurred in that particular financial year. Source document are first record transaction. It is used to keep the record in a systematic way. It provides us information which is useful in the business. It includes cash book and journal Bank reconcillation statement is a statement which is prepared to remove the discrepancies which occur between the bank statement and bank book prepared by the business. It helps to identify those errors and remove it. 7. An example of a purchase invoice is as under CREDIT PURCHASES (ACCOUNTS PAYALBE) Date Creditor Post Ref. Invoice No. Amount                                         8. For record keeping I need help from the financial administration in relation to certain changes and government rule with regard to taxation. Also posting of certain entries require some help from the authorities. LESSON 7 – ASSIGNMENT 1. Different sales approaches were used different types of business whom I visited. The approach used by business was personal selling, direct telephone, direct mail, party plan, shop window, etc. They were successful as they developed long term relationship. 2. The functions of a sale person are as follows- Helps to communicate about the product Demonstrating the product to the customer Monitoring the customer attitute towards a product Analysis of the market and demand pattern for a product Negotiating with the customer Improving goodwill of the business 3. The process involved in personal selling are as follows- Prospecting and qualifying: is identifying the customer needs, there likes and dislikes, to be able to demonstrate the customer the product or service they want The approach: is approaching the customer with the product so that demand can be created Presentation: is demonstrating the benefits and features of the product. Handling objections : is solving the queries of the customer to ensure high satisfaction The close: is ensuring that the customer purchases the same Follow up: is thanking the customer for buying the goods. 4. The main role of promotion is that they provide knowledge about the products. They give information of new products; company policies etc. This helps to create customer need for the product 5. Publicity meant to attract people by an event. It is held on a few ocassion and helps to create knowledge about a product through participation in events Advertising mean to advertise the product continousally over a period of time so that the target audience base can be eyed at. 6. Sales strategy for the business that I want to establish in the market is to identify the target market and then step so that the target audience can be eyed at. Today, in this competitive world it is essential to continuously satisfy customers. With customers being scarce the need increase. It’s important that customers are provided quality service. This requires continuous improvement. For this time has to be spent. This needs to be spent to improve quality. First of all I need to identify customer demand for the product. It is very essential because without customer we cannot sale our product. It’s very difficult to find out what customers prefer as their behaviour is irrational. Marketers need to be very alert and even a slightest of information needs to be communicated else it will result in piling of huge stocks. It is important that marketers put in their best effort and try to understand what customers want so that the product can be designed accordingly Secondly, I need to understand the customer needs. This can be done through research. A consumer preference also changes with the group he is. Social factors determine his purchasing habit. Suppose, a consumer comes alone he will purchase something what he likes. It will be according to his likes. When he is with a group of friends he will be influenced. This will change his pattern of buying. Marketers need to keep a watch on it. They should promote those products at the face depending on the circumstance. This will help the consumer as he will feel pleased and will want to visit again Thidly, I have to highlight the benefit for product. We have to tell the person what it can do for them personally. They need to be effective and see that products are also promoted in regional languages. This gives a feeling of belongingness to the consumer. This also attaches the product with the consumer. The next time he goes to the market to purchase one he creates the picture of the product in his mind and purchases those. Thus his buying is affected by what he sees. So, companies need to regularly promote their product. They need to do it to the correct segment to gain maximum return. Fourthly, I should control the conversation. If the customer embarrasses us then I have to control myself and not use harsh words. Handling customer complaints have become a part and parcel of every organization. It is important that business take complaints seriously as it would adversely affect their future business. Not handling the complaints efficiently would make the company lose vital customers as the customers have a variety of option to choose from so they would swap their brand and we may lose on some important revenues. Fifthly, I need to fix there problems by finding solutions for it. It will be beneficial in the long run as they will be able to handle if such problems arise again. A good work done at this level helps to keep customers with the company and also build goodwill as the customer realizes the company is always there to help them out. I also need to ensure that every step is taken which helps to ensure that the satisfaction is high and helps to generate sales in the future. This will help to build a long term relationship and will help to earn loyal customers. The overall marketing and sales strategy will pay rewards in the long run and ensure that my business runs efficiently in the long run. 7. The method that I will use to sell and distribute my products/services is direct telephone, mail, party plan, and shop window 8. The advantage of different selling methods are – It brings direct contact with the customer We can talk people at any places It helps to contact customer at distant places It helps to improve the marketing aspect as it helps to identify the customer want The disadvantages on direct selling is It might dicourage the customer as receiving phones while working creates anger It might make the customer dislike the product due to miscommunication Customers might think that using it is encroaching on their private space thereby making them look at the product with suspicion. LESSON 8 - ASSIGNMENT 1. Budgeting is a future estimate and identifies the manner in which the company will receive money and the area they will spend it on. It is used for planning and control so that steps can be taken to improve the efficency of the business. 2. The four different types of budgets are – Capital expenditure budget – this budget shows expenditure on items such as plant and machinery etc. This budget helps to indentify the expenditure of long term and take decision if the expenditure will pay rewards in the long run. Cash budget – is estimating the cash requirement of the business. It is prepared after looking in the inflows and outflows and is done to ensure that the business doesn’t have to face a liquidity crunch. Labour budget – helps to identify the labour requirements for the business. This helps to estimate the expensiture that will be spent on labour and helps to take the necessary step to reduce it and keep within limits Sales budget – this budget estimates the sales for future. This helps to identify the future sales. The marketing department on this can identify the areas they need to work upon to ensure sales and increase their customer reach. 3. The main budget lines which is relevant for business are – Sales Budget Production Budget Cash Budget Marter Budget Capital Budget Staff Budget 4. Budjeted profit & loss for the business looks as follows Income amount (in dollar) amount (in dollar) Gross sales 36400   Less returns and allowances 1000   Net sales   35400 Cost of goods 1600   Merchandise inventory, january 1     Purchases 900   Freight charges 200   Total Merchandise Handled 2700   less inventory, december 31 100   Cost of goods sold   2600 Gross profit   32800 interest income 100   Total Income   32900       Expenses     Salaries 250   utilities 580   rent 230   office suppies 250   insurance 390   advertising 650   telephone 270   travel & entertainment 255   dues & subscriptions 110   interest paid 214   repairs & maintenance 125   taxes & licenses 117   total expenses   3441       net income   29459 5. Capital budget is determining whether investing in long term assets are valuable for the business or not. Business evalaute it through different tools like Net Present Value, Internal Rate of Return and others to evaluate whether investing in a new venture is profitable for the business or not. 6. Factors that influence the overall cash position in business are as follows – Increase in expenses than planned Change in market share Lack of future projects affect the cash generating sources Changes in sale and demand pattern Excessive wear and tean on assets making them to be replaced LESSON 9 - ASSIGNMENT 1. Financial Target for different months First Month: On the first month we have to take a loan for a business. Third Month: Ensure regular collection from customer. Timely payment of interest and ensuring regular payment to creditors Six Month Target: Ensure regular collection from customer. Timely payment of interest and ensuring regular payment to creditors and finally generating revenues to be able to use money created by the business itself Year 1: Ensure regular collection from customer. Timely payment of interest and ensuring regular payment to creditors and also paying back the money taken as loan 2. Cash Flow Forecast All figures in dollar       INCOME open 1st year 2nd year sales   5000 5500 capital in 15000     total income 15000 5000 5500 FINANCES / ASSETS       loan repayment   200 150 interest paid   50 50 TOTAL FINANCES / ASSETS   250 200 DIRECT COSTS       Materials   200 150 direct labour   250 100 TOTAL DIRECT COSTS   450 250 EXPENSES       salary   2000 2500 office rent   200 250 telephone   500 600 utilities   100 400 insurance   1000 1000 TOTAL EXPENSES   3800 4750 OPENING BALANCE *   15000 15500 TOTAL INCOME 15000 5000 5500 TOTAL OUTGOINGS   4500 5200 NET CASH FLOW * 15000 500 300 ENDING BALANCE * 15000 15500 15800 3. The business plan which I intend to develop for my business over the next year to improve the performance of my business involves the following Identifying the Mission statement – I would like to develop the business plan I would like to achieve in the next few years. This will highlight the area that I need to work upon to improve the planning process. Development and status - the location should be situated in the main market. When an agreement is signed there should be free rent of construction for atleast two months and in that time we have to start making profits. When this phase will be completed our project plan for resturant will start. Future plans – if our first restaurant has been completed then we have to start for next restaurant. Our main aim is to open atleast three resturant. So everything should be done accordingly. For the product and related services I intend to use the following steps The menu – the menu should have standard size. It should have a fair which matches quality. Varities of food should be available. Food should have a good flavour and low fat and cholestrol. Production –There should be fresh vegetables. The chef should see a quality of production and presentation and packing. This all will be done on kitchen. Services – there will be three ways in which customer can purchase food. First by sitting in the dinnig room and the waiter will serve the food. Secondly they can pack their food and thirdly by telephone or a fax food can be delivered. I intend to use the following target market strategy for the restaurant. Customer will come in three major segments Local population – restaurant should be where there is a high poopulation. It should be on a rush area so that restaurant can get a good response and it will be profitable. Colleges and university – restaurant should be situated where there is a colleges and university because normally tenagers are fond of resaurant. Tourism – there should be rooms available for tourist. There should be a room service where people find comfort while residing at the place. The food should concept will attract three different customer profiles the student, health conscious person and the open minded and curious person. To fight competition I intent to do the following There are number of restaurant so to be in competition we have to deliver good quality food, at reasonable prices so that the customer will be loyal. Once a restaurant will be famous then it will be easy to target in the market. For the marketing strategy I inetnd to use the following marketing strategy Market penetration - to enter in to a market is not a big problem. We have to advertise of our restaurant because so that people become aware of the restaurant and visit it regularly. Marketing strategy – to be used to advertise about the restaurant will be through the following media Print media – local newspaper, magazines, and student publication Broadcast media – local program and special show Hotel guides – concierge relations Direct mail – offices for deliver, Misc pages – charity events and yellow pages. For the operations of the business I intend to use the following Facilities & offices: New equipment and furniture will be purchased. Hotel should be well organised. It should have good facilities. Hours of operations: The restaurant should open seven days a week. Service will begin at 10 a.m. to 12 a.m. Employee training and education: Employees will be well educated as well as they will be trained properly. Systems and control: Food and stocks will be handled by computer and will be evalated daily by the management. Surprise check will be done to check the taste of the food. Food production: The kitchen will be well designed to keep the area clean and use appropriate measures to keep the surrounding clean. The overall management organization will be as follows Management has to be innovative and keep a corporate style. Employees will be given good wages and salaries along with other benefits. There will be a general manager and executive chef to look after the management affairs of the company. They have to report to president. The overall management will thus help to shap the performance of the organization and help to ensure that good profits are earned. 4. Time line is as follows JANUARY FEBRUARY MARCH APRIL MAY JUNE             purchase vehicle advertisement office expenses borrow capital tounament expenses purhase machinery entrance fees paid increase service   machinery evaluation commission puchase stationary         furniture   JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER             employ new staff salary paid insurance claim outstanding subscriptions investments land purchase   telephone expenses printing business cards   loan taken from bank           goverenment grant LESSON 10 - ASSIGNMENT 1. A business plan is one of the excellent way in which we can take a business to a right track. Once we have achieved the plans and strategies then we start the business. We motivate ourself through leadership, direction and communication. Implementation means to take the plan in to action. Without the proper implementation business will be not be successful. Once we have achieved the goals then we must identify how to use the resources. The steps to implement the program are Most important is to see the sales and the purchase are repeating. We have to ensurecoaching and training for team members. We have to watch that all the objectives are achieved. We have to create a time and see how much costs and resources will be needed to achieve those. We have to assign responsibilities to different employees. By doing so we have to give authority and responsibility to be able to deal with the situation. We should motivate our employes and make them realize the important role played by them. We have to create a balance sheet and see the progress. This will provide both positive and negative feedback. We have to find the areas that were reaping good results and the strength that business receives due to it. If any changes are needed it has to be done with and regular evaluation has to be done to ensure that the work is on track. 2. The various products and services which will be available for the small business are as follows Bank Loan Term Loan Loan from business houses Government bonds 3. The most suitable source of finance for the firm will be bank loan. The reason for it is that it will help to ensure that the loan is raised easily and will help to finance the business. Also taking a loan from bank will ensure that the limits are controlled and the loan amount doesn’t get out of control. LESSON 11 - ASSIGNMENT 1. The golden rules mentioned which is important for business to suceed are – Honesty good relation Dependable Training Quality of raw material Pride Leisure hours along with working enviornment Understanding customers Offer gurantees 2. Business output: will be evaluated by comparing the actual performance with the stated objectives. This will help to find the discrepancies that the business is witnessing and will help to identify the areas that need to be worked upon to improve the business output. Customer satisfaction: will be evaluated by ensuring repeat purchases. This will ensure that the customer is satisifed with the services and product and will help to build long term relationships. Operational targets: will be evalated by comparing the performance with the standards set before. This will also be done by comparing with other business in siliar lines to find the areas that needs to be worked upon to improve the overall efficiency of the business Technical standards: will be evaluated by comparing it with the already set standards. This will help to find the differences and taking steps in the direction to fix those will ensure that such differences don’t arise again. 3. The company has been successful as it has innovated and developed its product line by launching new variants. The company has launched products eyeing the premium segment. The analysis highlights very important facts. The analysis helps to evaluate the manner target market was ascertained. It helps to identify the marketing strategy and positioning of its product and also have a comparison with its main competitor. The SWOT analysis shows the different areas which will help the company to grow. The 4P’s also help to find the features the new product has. The packaging looks into aspect of marketing and customer appeal. Based on the above a customer survey is provided which highlight the customer preference for different products, the pricing pattern, and how important packaging holds. The above analysis thus helps to find important areas where the company can work on. The financial analysis also highlights some important fact related to liquidity and capital structure. The findings show the positives and negatives based on financial analysis. The ratios like liquidity ensures to find liquidity and the capital financed by the company are demonstrated by capital structure ratios. The efficiency ratio indicates the area where company need to work to stay ahead of competition. The capital market ratio indicates the companies which are favoured by shareholders and also help to look into the future prospects of the company. The analysis shows that the company performance has improved drastically. It still needs to work on certain areas to stay ahead of competition as the company has shown stability and need to inculcate those so that it is able to withstand competition and capture a bigger market. Lesson 12 Assignment 1. One of the set tasks mentioned in the articles is to increase profits every year. To increase profit first of all we have to reduce expence which has to be matched by an increase in production. The price charged should be the maximuthat the customer is willing to pay for that product. We should discovered new technology to improve efficiency in operation. The management has to ensure that every small aspect of the business is looked after which will help to ensure that profits sore. 2. We have to maintain a debt equity ratio. This will help to understand the debt the business has. We have to reduce debt and increase equity. The business should ensure that debt is taken to such a point that it doesn’t affect the working of the business and the interest and the original sum can be paid out of the operation of the business. This will ensure that there is proper management and the business is able to control debt. 3. Factors which can influence cash position are as follows Customers: have a long term affect on cash. If the debtors pay there dues early and there is minimum or no bad debts it results in good cash position and helps to ensure sufficiet liquidity in the business Suppliers: also has an effect on the cash position. If goods arepurchased on cash and creditors are paid early this could reduce cash and could create a cash crunch in the organization. Terms of trade: has an effect on cash. If business sells goods on cash and purchases on credit then it has a strong cash position. Even if the cash is recovered from the debtors early and creditors are paid later helps to ensure sufficient cash for the business 4. Every business main aim is to increase profit. It can be done only if we give time in business. We have to reduce our expences. We have to motivate the employees so that they have the interest in business. Prouction also has to be increased. Maximum amount of goods should be sold. Business will grow if it achieves a greater efficiency. We have to maintain a good relationship with workers. Then only workers will show interest in work resulting in better efforts and sale. In order to expand business there should be a large amout of funds so that we can purchase new equipment. Some factors which can help the business ensure sufficient profit is Plant and equipment matching the business requirements Abundant raw materials Availability of physical and natural resouces such as land and labour Work oriented staff New methods and tecnique of production Proper management Read More