Why should organisations collect, file and maintain accurate financial records?
There are many reasons for which businesses should maintain complete and accurate financial records.
First, as a practical matter, complete and accurate financial records assist in operating the business. If records are incomplete or inaccurate, it is difficult for a business to measure success or failure, and it may even be difficult to determine whether or not a business is operating at a profit or at a loss.
Second, complete and accurate financial records allow the business to measure all aspects of business and target marketing and development accordingly. Businesses can evaluate the supply chain, marketing avenues, etc.
Third, complete and accurate financial records allow investors to evaluate the company. Without such records, investors would not be comfortable investing in the company and without those investors, company growth would likely stall. Accordingly, it is important to be able to show investors why they should invest in a company, while simultaneously showing investors exactly what they are investing in and, to some extent, what they can expect to gain/lose from the investment.
What are the expectations of managers and supervisors in relation to budget or financial plans?
To successfully manage your organisation’s or team’s financial resources, you need to be familiar with the organisation’s priorities and objectives for the short- and long-term as articulated in its strategic plans, and understand how these are translated into the resulting organisation budget and then into team budgets. Learn more about budgets and and other busienss knoelege by completeing a Certificate IV in Business Administration BSB40515 by enrolling in this course with Edna.edu.au. General details about Business administration can be found on the Australian training website
Your role is to support team members by explaining the team’s budget to them and ensuring this will help them achieve their goals. Any variations or events that impact on the budget need to be identified, documented and negotiated promptly with appropriate personnel within the organisation, such as accountants, frontline managers, and supervisors.
What are the reports that can be used for financial planning in an organisation?
The financial situation of an organization is shown to its members through various types of statements. They include: – Budget – Income Statement – Project or Event Report – Balance Sheet
All financial statements indicate the type of statement, the organisation’s name, and the date or time period it covers.
Budget – A budget is a written plan that forecasts income (revenue) and expenses (disbursements) for a specified period of time (usually one year). Expressed in dollars, the budget is based on an organisation’s goals and ensures realistic planning of programs. Through its use, members can control and co-ordinate finances and programs.
Income Statement – This report, also known as a Statement of Operations or a Statement of Receipts and Disbursements, gives a picture of how much money was earned (revenue) by the organization and how much money was spent (expenses) over a specified period of time.
Project or Event Report – Organisations often prepare a financial statement to report on specific programs or events. Project reporting not only gives an accurate financial record of activities or events but is also helpful when planning future events.
Balance Sheet – A balance sheet is a summary of the financial position of an organisation at a specific point in time