Accounting functions of a Business Plan Essay
Before beginning to operate a business, one is required to formulate a workable Business Plan. This is a document that many sponsors may base on before accepting to come on board as sponsors of the alleged business venture. Among key topics of concern are accounting and finance part of the business. One needs to categorically give, or present the relevant information as pertaining the Accounting and financing part of the Business in question. We shall discuss to a greater extent this part of the business plan.
The Business shall be known by the name of “Western Feather World Limited”.
This shall stand out to be a one-man business, better called a Sole Proprietor.
Reasons for choosing on the Sole Proprietorship structure
A one man business may be preferred to other kinds of business like the partnerships or the corporations because it’s a one-man centered entity. This shall certainly bring about ease in management of the Business. Secondly, a sole proprietor enjoys all the proceeds from the business alone, in that he does not have to share the profits with other people who may claim to be shareholders in the business. (Harrie Goldman, 1996) Besides, I shall have the chance to infuse my family members in the daily running of the business. Since I realize that the family can be a cheaper source of labour, I think of incorporating them in the daily running of this venture. Through getting the family members take a participatory role in the business, this shall be a good chance for them to learn.
Types of services, and or products provided by the Business
The Western Feather World Limited shall mainly be a project specializing in the breeding, rearing and sale of major forms of poultry such as chicken, ducks, turkeys, geese and guinea fowl. These birds shall mainly be kept for the purpose of egg laying, but sometimes they may be converted into table birds on attaining a particular age, which I shall consider it to be “old age”.
As a result, the products of these projects shall basically be consumer products such as eggs, meat and aesthetic appeal (beauty). These, I shall price them differently according to the prevailing market prices, customer demand and other factors put into consideration.
The role of Accounting in the Business
Accounting shall serve to see to it that records are made and updated in financial books and statements, on almost daily process as long as the business is in progress. It’s these records that are in the end analyzed and decisions made basing on the performance of the business, either after half a year or after a full financial year or trading period.
It should be noted that all the information is produced and used to develop a business accounting score-card, and which should be a balanced accounting scorecard. It’s from this that all the information is digested and meaningful decisions made.
Work characteristics considered when hiring an accounting staff
Before hiring an accounting staff, the following work qualities shall be put into consideration, as discussed. To start with, the person must be well versed with the relevant accounting information and technicalities necessary to execute the duties that I shall assign unto him. The incumbent should be well versed with the laws and or rules applicable to the international accounting principles. In addition he should be acquainted with basic taxation principles.
The candidate should know the business techniques used in Business management and administration. The candidate should not be extravagant with company funds. The qualification to this is that the person’s personal funds should be in order. Above all, the recruit should be a good time manager. He should be able to effectively and efficiently. Unsuccessful time mangers cannot make good accountants. To add on, the candidate should be of commendable etiquette while in office.
Education that a person should have in budgeting, internal controls and cash management before going into business
Before going fully into business, one is supposed to have knowledge in basic book keeping (this call and some knowledge about the market trends which shall help in the budgeting and drawing and balancing income/expenditure statements (Harrie Goldman, 1996)
Internal controls for the business that shall include the knowledge of basic record keeping is also necessary.
Among the internal controls to be put in place include record keeping systems such as Purchase order systems, receipts and payments systems. Besides, it would also be necessary to establish a standard system meant for acquisition of new stock or sale of a company’s products. By so doing, one would curb unwanted business acts; and especially one that would lead to losses.
For instance, for the case of Western feather-world Limited, records would be in place to take care of the daily feeding of the birds, eggs sold record, damaged eggs record, goods acquisition record, health record, etc. all these records must have myself as the final person to authenticate (Lynford Graham, 2007).
How managers would use the financial information to predict outcomes for the business
Managers of a business are the people who need the information more than any other person in the business. They need accounting information in order to try and compare whether the business is improving, stagnating or regressing. This is established after comparing with the earlier established strategic management decision. Information from the accounting department is compared, and any deviations determined. If negative, solutions are put in place to ensure that the business is doing as planned. If the business is doing better than was planned, then the employees are rewarded for a good job well done.
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Lynford Graham (2007), “Internal controls: Guidance for private, government and non-profit entities”, page 1 Harrie Goldman, “The Handy Cyclopaedia of Business”, Page 3