organisation management. #chap 4

THE PURPOSE OF THE FINANCE FUNCTION.

By- Prachee Karmakar & Ali Asgar Sagar

CONTENTS

FINANCE FUNCTIONCONFLICT

KEY ACTIVITIES

COMPANY SECRETARI-

AL

COMPONENTS

INTERNAL AUDIT

FINANCIAL ACTIVITIES.

TREASURY MANAGEM

-ENT

MANAGEM-ENT

ACTIVITIES


What is FINANCE FUNCTION.?? Financial functions. Financial

functions calculate financial information, such as net present value and payments. For example, you can

calculate the monthly payments required to buy a car at a certain loan rate using the PMT function. ... The

payment required by the term, interest rate, and principal.


KEY ACTIVITIES

ACCOUNTING OPERATIONS

PLANNING CONTROL

ANALYSISDECISIONMAKING


COMPONENTS OF FINANCE FUNCTION.

FINANCIAL ACCOUNTING

MANAGEMENT ACCOUNTING

TREASURY ACCOUNTING

INTERNAL AUDIT


WHAT IS FINANCIAL

ACCOUNTING.?

FINANCIAL STATEMENTS

ACCOUNTING STANDARDS

BOOK KEEPING

EXTERNAL USE.


BOOKS OF PRIME ENTRY....


1.TRANSACTION

4.SOPL

5.SOFP

6.STATEMENT OF

CASH FLOW

2.DAY BOOK

3.LEDGERS

SEQUENCE OF STEPS IN ACCOUNTING

FUNCTION.


OWNERS

MANAGERS

BANKS

STAKEHOLDERS

EMPLOYEES

GOVERNMENT

SUPPLIERS & CUSTOMERS

NEEDS OF FINANCIAL STATEMENTS


What is MANAGEMENT ACCOUNTING.?

Management accounting is basically an internal accounting.

Management Accounting assist management in discharging their duties.

It is concerned with process of Measuring, Analysing, Interpreting, & Communicating information in a easy way.

Main purpose is to aid to Planning Controlling and Decision Making


COST SCHEDULES

BUDGETS

VARIANCE REPORTS

MANAGEMENT ACCOUNTING

MAINLY FOCUSES ON THREE MOST

COMMON THINGS,


Let’s talk about cost schedules..

Cost Schedules lists the involved in manufacturing unit of product.

Often shows while making a unit of a product.

Generally, it is called

VARIOUS EXPENCES

LIST OF COST INCURRED

STANDARD COST CARD


Standard Cost Card...SINCERE ltd. Manufactures toys. One of its product is wooden train set, following is the cost card for the toy :-

$

Direct Materials 5.50Labour 6.50

____Prime Cost 12.00Variable Overheads 4.00Marginal Cost 16.00

____Fixed Overheads 5.00

____Total Absorption 21.00By- Prachee Karmakar &

Ali Asgar Sagar

Key Business Decisions

Pricing Decisions

Breakeven Analysis

Key Factor Analysis

Investment Appraisal


Budgeting

Budgeting is the process of creating a plan to spend your money.

This spending plan is called a budget. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do.

Budgeting is simply balancing your expenses with your income.


CRUMPET

Responsibility

Motivation

Co-ordination

Utilisation

Planning

EvaluationTelling


Variance Report.??

Compares the budget to actual results

Helps in controlling process.

Prevents from adverse variances.


What is TREASURY MANAGEMENT??

Treasury management is the corporate handling of all financial matters, the generation of external and internal funds for business, the management of currencies and cash flows, and the complex strategies, policies and procedures of corporate finance.


Key roles of the Treasury function


Management of Working Capital

Working capital is the capital available for concluding the day to day operations of an organisation, calculated as the excess of current assets over current liabilities.

Inventory XTrade receivables XCash X

_____Total current assets XLess. Trade payables (X)

_____Working capital balanceX

_____The treasury function is responsible for deciding on an appropriate level of investment in working capital for the business. By- Prachee Karmakar & Ali Asgar Sagar

WORKING CAPITAL BALANCEAdvantages of LARGE BALANCE• Inventory – customers are

happy since they can be immediately provided with goods.

• Trade receivables – customers are happy since they like credit.

• Cash – creditors are happy since bills can be paid promptly.

• Trade payables – Preserves your own cash.

Advantages of SMALL BALANCE• Inventory – low holding

costs. Less risk of obsolescence costs.

• Trade receivables – Less risk of irrecoverable debts. Good for cash flow.

• Cash – More can be invested elsewhere to earn profits

• Trade payables – Suppliers are happy and may offer discounts.


Foreign currency By- Prachee Karmakar & Ali Asgar Sagar

What is INTERNAL AUDIT ?


INTERNAL AUDIT Assurance and Consulting Effectiveness of Risk ManagementControl and Governance With Commitment of Integrity and Accountability


Purposes of Internal AuditTRUE and FAIR Statements.

Directors also need assurance.

Company employees or Outside experts.

Organisational control of a business.


Corporate Objectives

Internal Auditing also includes,.

Design & monitor performance

measures.


Reviewing internal controls

Reviewing risk management

system

Carrying out special

assignments

Reviewing financial reports

Conducting operational

reviews.


Unavoidable independence

problem

Properly staffed and

resourced

Fraudulent management

Resource constraints


COMPANY SECRETARIAL

COMPANY SECRETARY have a key role to play in ensuring that the board procedures are followed regularly.

All listed company are required to have a company Secretary.

Due to increase focus on CORPORATE GOVERNANCE the role of Secretary has grown in importance.


FORMAL DUTIES.MAINTAINING STATUTORY BOOKS

OF THE COMPANY(REGISTER OF ALL DIRECTORS)

ENSURING SECURITY OF COMPANY’S LEGAL DOCUMENTS.

ARRANGING MEETINGS OF DIRECTORS & SHAREHOLDERS

FILING ANNUAL RETURNS AT COMPANIES HHOUSE

INFORMING COMPANY’S HOUSE ANY CHANGE IN THE STRUCTURE

OR MANAGEMENT.By- Prachee Karmakar & Ali Asgar Sagar

VS

CONFLICTS WITHIN THE FINANCE FUNCTION.

INTERDEPENDENCE INDEPENDENCE

SHORT- TERM

CAPITAL REVENUE

LONG-TERM


THANK YOU...

BY- PRACHEE KARMAKAR ALI ASGAR SAGAR.

organisation management. #chap 4

Education