Manage Financial Operations

Manage Financial Operations

Short term effects of ignoring the Issues

The short term effects would be:

Slow cashier service – The cash register will be much slower and will make the cashier job

Cannot sort out the revenue – the company cannot identify what foods and drinks were purchased for every bill.

Less profit – the company purchases too much stock and therefore minimises profit.

Waste of stock – waste of food is bad and creates more waste to throw away.

Suppliers not happy with the partnership – Suppliers argue about the late payments.

Long term effects of ignoring the Issues

The long term effects would be:

The company cannot monitor and track the performance of each food and beverage – the company has not idea which dishes are being sold and therefore cannot know what ingredients need to be increased and decreased to maximise profits.

Less profits leading to slower growth, or even loss of money

Loss of good relationships which could save you time and efficiency

Immediate Financial Management Requirements

The most important thing is to ensure that the restaurant has an effective and efficient budget plan that will reduce food wastage and maximise profits. To minimise the chances of losing profits, the company must implement a careful and strict budget. The budget is used to ensure that the company does not over spend on ingredients and becoming sustainable.

Investing in a new cash register will also improve the company’s overall efficiency and will help improve the customer satisfaction as they do not have to wait so long for the slow and out dated cash register. The cash register will also help the accounting of the restaurant as the new cash registers have the ability to record each order and calculate which dishes are being purchased more than others. This will improve the effectiveness of the budget and make sure that will effective. Looking at the variance reports will also be needed in identifying the Financial Management requirements. The Variance reports will be a report that identifies the differences in actual performance compared to expected performances.

Cash Flows Statement is referred as lifeblood of organisation because it includes actual cash been received and paid for period of time by the organisation throughout its business activities and operations. Three elements of Cash Flow Statements are Operating, investing and financial activities. Because operating activities are how company is operated daily basis such as receipts payment form customer or payments to suppliers for goods and services. Investing activities are what needs for investing purpose such as payments for property or interest and dividends received. Financing activities are what needs for managing borrowing or loans such as repayment of borrowing and finance costs.

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Financing activities are what needs for managing borrowing or loans such as repayment of borrowing and finance costs.

The last thing would be to plan ahead and pay the bills on time. This is important in making a strong relationship with the suppliers. This can benefit the company significantly, as long term relationships can result in discounts and loyalty bonuses which can save the restaurant a lot of money.

Procedures

Food and Beverage Operations

Identifying which dishes and drinks are ordered will benefit the organisation is it will know which beverages are popular and which ingredients should be decreased.

Food Cycle

Since the foods are regularly wasted and going out of date. It is important that the purchasing cycle is changed. The food should only be bought when the current stock is running out. Buying too much food will cause food to go to waste and also cause a loss in profits. Allowing the food cycle to slow down and purchasing less frequently will mean that products will not go out of date so often.

Operational Planning

Also planning the operations of the restaurant more carefully can help improve the restaurants performance. This means planning ahead and making sure that the company’s operation strategies can generate the get profits.

Capacity Management

This is when you ensure that the right amount of ingredients and products are purchased and stored correctly. The restaurant should have an estimated amount of capacity that they need to maximise efficiency without going out of stock.

Variance Report

As explained earlier in this report, it is simply a report which identifies the differences in expected and actual performance. This can help identify the strengths and weaknesses of a company.

Automated sale and inventory control

This can be a very effective way to improve the business operations and also lessen the amount of responsibility that the staff have in counting and monitoring the stock and sales.

Computerised Inventory Control

This is similar to the automated inventory control, as the system automatically reports, monitors and alerts any changes needed or any performance outcomes of the inventory. This really reduces the amount of effort that the accountants and managers need to put into managing the inventory.

Wastage report

The wastage report is very vital, especially for this company because it identifies the amount of wastage that the restaurant produced each week. The wastage should be lessened every week until there is a satisfactory level of wastage. Though the orders change every week and the customers are unpredictable, the company much still try to reduce the amount of waste, as much as possible.

Steps involved in the accounting process

Transactions

Journal entries

Posting

Trial balance

Work sheet

Adjusting Journal Entries

Financial Statements (income statements, balance sheets, cash flow statements)

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