Restaurant Financial Projections
Added on 2020-03-16
13 Pages3666 Words81 Views
Finance
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Financial Management[Type the abstract of the document here. The abstract is typically a short summary of the contentsof the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.]
Part AQuestion 1Managers estimate costs for the future for effective financial management. One of the most important sources of obtaining information in order to estimate the costs is the historical data relating to such costs. Like for estimating the cost of purchases, the manager can refer to the purchases made in the past and the rate at which the material was purchased. Another source for gathering such information is to gather the competitor’s data which may be available in various software available in the market for purchase [ CITATION Tol13 \l 16393 ]Question 2It is very important for businesses to keep records of all their business transactions throughout the year. These records are especially helpful for tax purposes. Three banking records which should be kept by a business include:a) Cheque book – a cheque book is a small book containing cheque leaflets used by a business to make payments through their bank accounts. All the details of the cheques whichare written should be recorded in the cheque butt.b) Deposit book – these books are available from the bank to be used to record sales. The deposit book has details of the date of deposit, the payer’s name and the amount of deposit[ CITATION ird17 \l 16393 ]. The deposit book categorizes each deposit into cash, cheque or credit card depending on how the money is received.c) Bank statements – bank statements are available from the bank on a monthly basis. Such bank statements should be acquired for both private and business account. A reconciliation ofthe bank statement with the cash book helps in preparing the GST returns.Question 3The personnel with whom one may communicate regarding the documentation of outcomes and information on customers, competitors and business operations are head of sales team, head of marketing team and the operations head respectively.Question 4
Contingency plan is plan B in a business in case the expected results do not materialize. It is the alternative course of action a business may take in case any unexpected events take place in order to avoid losses and provide opportunities for a business. It is a risk management tool used to mitigate the impact of risks associated with the unexpected event.It is important for every business to have a contingency plan; the various reasons for a contingency plan are discussed below:a) For better flexibility – such plans provide more flexibility in doing business as it prepares for any unseen challenges. Like if there is a change in the government policy or a slowdown in the economy, having such contingency plans will help the business in dealing with such changes effectively without having any catastrophic effect.b) Prepares for the worst – the objective of contingency plans is to prepare the business for the worst, thus avoiding losses. Instances like loss of all documents in a fire or death of the president in between an important deal are unlikely and dangerous events, however better plan b planning will mitigate the impacts.c) Faster reaction – firms with plan B react faster than the ones who do not have one. This may result in less damage to the organisation. Also employees of companies with contingency plans are more prepared and come out with great solutions to such unexpected events.d) Prevent panic – people generally panic in a business not because an unexpected event has aroused but because there is no solution, however with contingency plans a backup solution is available and hence it avoids panic in people and they are able to think and react better and faster.There is a process to develop a contingency plan, the steps involved in developing such plan is discussed below:1) Developing the contingency planning policy statement. This policy provides guidance in development of the plan.2) Conducting a BIA (business impact analysis). Under this analysis the business functions orcomponents are prioritized depending on the mission of the business and factors are set for allthe prioritized items. [ CITATION Gov10 \l 16393 ]
3) Identifying the preventive controls by reducing things causing systems disruptions in orderto increase system availability and prevent the company from any harm.4) Make contingency strategies which are effective and can tackle the situation quickly in order to reduce the recovery time.5) Developing an efficient information system by including all necessary guidelines and procedures needed to recover from a damaged system which is unique to the system.6) Regular testing, training and exercises should be done in order to make required improvements to the plan according to the situation of the organization, thus preparing the organization for better recovery.7) Maintenance of the plan by updating the plan as per the changing environment. The plan should be flexible enough to account for any changes in the daily procedures, organizational changes and system enhancements.Three specific areas to be included in the plan are natural disasters, crises like working accidents and changes in government policies.Question 5A financial plan determines the activities needed to be carried out, the resources required, the assets to be purchased and maintained and the materials needed to achieve the company goalsand objectives. A financial plan is normally prepared after preparing the company’s mission and vision. A good financial plan should include the following:a) Requirement of funds – the plan should indicate the funds necessary to start the business.b) Funding required in the future – the plan should include the amount of funding required over the next few years.c) Use of funds – it should clearly mention the areas where the above funds are to be used for effective funds management.d) Timeline for funding – it should mention the time frame in which the funding is to be carried out.Question 6
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