F1-ch8.ppt

2. Internal reports Cost schedule It can be produced for the wages, departmental costs, cost of sales, selling expenses, administration costs etc which enable s managers to keep a check on what the business is spending. Budgets Budgets may be prepared to show projected sales, the costs, profits or the overheads. Budgets enable the department to identify potential problems and arrange overdraft facilities with the bank in advance. 2. Internal reports Variance reports The variance reports detail the differences between the actual performance and budgets and explain any material variances. F1 Financial systems, procedures and related IT applications 1. Control over business transaction Office organization Function Comment Purchasing Make necessary purchases and reach the best purchasing mix HR Hiring, firing, training staff and providing welfare for staff Finance Proper management of finance and financial management Sales and marketing Taking sales orders, advertising effectively General administration Secretarial support; telephone queries; rent or properties 1. Control over business transaction Control over transactions Management must have control over the following areas: a. Sales on credit made to new customers. b. Purchases of goods or non-current assets and payments for expenses. c. Payroll 1. Control over business transaction Financial control procedures Purposes of financial control procedures: a. Financial transaction are properly carried out b. The assets are safeguarded c. Accurate and timely management information is produced 1. Control over business transaction Financial control procedures Examples of procedures: a. Cheques over a certain amount need two signatories b. Authorization limits for purchase orders c. Authorization for petty cash and expense claims d. Effective credit control procedures e. Computer security procedures 1. Control over