Finance & Accounts by HC120807103038

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									Finance & Accounts
      Theory
          Core Aim of a Business
To survive!
To make a profit (private sector)
To improve or expand (public sector)
Function of Finance &
      Accounts
    Financial Accounting
   Management Accounting
                      Financial accounting
 Financial Accounts
    Accurate collection and recording of financial
     transactions eg receipts, invoices, payments, raising
     cheques & statements
    Maintain the book-keeping and construct accounts
    Give an important baseline of financial information for
     managers by analysing and interpreting the data
    Relate to past performance
    Communicate with external agencies such as HMRC (HM
     Revenue and Customs), Banks, suppliers, investors
          Financial Accounting tasks
 Carries all tasks relating to money-in, and money-
  out
 Communicate both internally (Sales, Marketing &
  Human resources), and externally
    Payments received for goods & services
    Banking of these payments (cash, cheques, BACS)
    Payment of staff wages
    Arranging payment to suppliers (raw materials, stock,
     services such as:
       water, gas, electricity, phones, rent, mortgages, loan
        payments etc

                                                    Continued . . .
 Communicating to the Inland Revenue the tax to
  be paid by both the organisation, and the
  employees
 Communicating to HMRC (Customs & Excise) each
  quarter, all details about VAT
  (VAT received by customers - payment of VAT to suppliers = VAT owed to HMRC)

 Communicating with Shareholders
 Communicating with Banks
           Management accounting
Management Accounts
  Monitor, measure and control progress of the
   business
  Use financial accounts to review and analyse
   performance, and to forward plan
  Communicate their findings with other
   managers, and join with them to plan changes
  Fundamental in strategic planning
                                             In summary
 The tools of management accounting help support the policy
  of a business.
 Strategic, long- term decisions involve the future direction of
  the business.
 If the forecasts and decisions are right, the business will
  grow and succeed. But if a business makes poor decisions, it
  may fail.
     For example, a business may decide to invest in new technology
      to improve the efficiency of production. If it has analysed the
      benefits properly, the investment will lead to growth and
      more profit. However, if the business has not evaluated all
      factors and the technology is untested, it may not give a return
      on investment.

								
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