Ed's White Goods: Management Report (Assessment 1, 2, and 3)

This report analyzes the financial management practices of Ed's White Goods, covering three assessments. Assessment 1 focuses on personnel advice, management requirements, sales forecasting, expense estimation, and profit projections, along with report layout compliance. It also addresses delegations, budget accountabilities, documentation procedures, risk management, and financial performance policies. Assessment 2 involves variance analysis, identifying discrepancies between budgeted and actual figures, providing reasons for these differences, and assessing the effectiveness of cost budgeting techniques. Recommendations to correct variances are also provided. Assessment 3 identifies and evaluates three financial management software options, assessing their effectiveness based on price, usability, features, compatibility, and specialist capabilities. The report demonstrates a comprehensive understanding of financial management principles and their application in a real-world business context.

ADVANCE DIPLOMA OF
MANAGEMENT

Table of Contents
ASSESSMENT 1.......................................................................................................................1
PART A......................................................................................................................................1
List personnel’s advice required in commencing reports.......................................................1
Determine management requirements....................................................................................1
Prepare sales forecast, estimated expenses and estimated profits..........................................1
Ensure report layout will comply with management information requirement.....................4
PART B......................................................................................................................................5
Discuss delegations and budget accountabilities for implementation....................................5
Develop written procedures for recording systems and documentation process in
monitoring and controlling activities......................................................................................5
Prepare risks management and contingency plans along with the policies............................5
Develop a policy and procedures to outline maintenance of financial performance.............7
ASSESSMENT 2.......................................................................................................................7
Prepare a variance analysis between budgeted and actual figures.........................................7
Demonstration of major differences.......................................................................................7
State the positive or negative discrepancy by giving 5 reasons for the same.........................7
Determine the effectiveness of cost budgeting techniques.....................................................8
Give recommendations to correct the variances.....................................................................8
ASSESSMENT 3.......................................................................................................................8
Identify and evaluate 3 financial management software and assess its effectiveness on
various factors such as price, usability, features and functions, comp ability with other
programs and capability with other specialists.......................................................................8
REFERENCES.........................................................................................................................10

ASSESSMENT 1
PART A
List personnel’s advice required in commencing reports
There are various personnel’s advice has taken by Ed’s white goods firms before
preparing financial budgets. It is important to seek the approval of all the members involved
in a firm to get the desired financial results within a stipulated time period. Top management
will seek the approval of all the board of directors by arranging an official meeting by
discussing the current financial position of the business and their decision for the betterment
of the firm. Any decisions that are material in nature as it directly affects an entity’s financial
performance require the approval of the board of members. After seeking approval of the
board of members an enterprise owner will call annual general meeting of all the shareholders
to discuss their decisions with all of them (Minnis & Sutherland, 2017). Consent of all the
shareholders is essential as their money has invested in an entity. Sales can be forecasted by
analyzing the current condition of the business concern. Expense budget prepared by an
entity requires the initials of the desired departmental manager to authorize all the business
transactions to get utilized in preparing financial budgets.
Determine management requirements
Management of Ed’s White goods will prescribe various requirements which need to
be followed by all the personnel working in an entity to prepare various financial reports.
Increasing sales prices of product from one year to another by considering the effect of
external inflation rate in the market for the sales forecasting. Cost plus pricing techniques
used by the firm that helps in increasing the overall sales generated by an entity that includes
all the costs incurred in a business along with specific portion of profit margin wants to earn
by the firm. Current policy of the firm states that 8% increase in the sales price but overall
sales reduces by 3%. Lack of loyalty of all the customers, the expected sales of an entity has
reduces by 12% which is big loss for the firm. An expense of the business has increases by
5% which increases liability imposed on an enterprise.
Prepare sales forecast, estimated expenses and estimated profits
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Particulars Jan-September November
Total sales 1080000 132700.5
Reduction of 3% 32400 3981.016
Total sales after reduction 1047600 128719.5
Expected sales reduction of 12% 125712 15446.34
Expected Sales after reduction 921888 113273.18
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Particulars Amount
Phone service 65
Electricity 132.5
Gas 50
Water 45.83
Insurance 108.33
Payroll 38750
Cleaning 70.83
Finance costs 137.5
Advertising 46.67
Rent 2083.33
Petrol 46.67
Accountant fees 30.83
Maintenance 117.08
Bank Fees 17.5
Office Supplies 50
Total 41752.07
Office salary 47000
Expenses -5247.93
Ensure report layout will comply with management information requirement
Parameters set by an enterprise owner which will be helpful for an organization in
building all the financial reports in determining the financial position of the business in the
external environment. Allowing GST in sales and purchases need to be recorded separately in
4

the books of accounts for which special tax return filed by an entity to reduce its overall tax
obligations imposed on an entity. Tax applicable on purchases can be taken as input tax and
at the same time tax paid on the sale of goods and services can be taken as output tax credit in
decreasing the tax obligations of the business (Lin, Pfeiffer & Porter, 2017). Tax return need
to be filed within a stipulated time period so that an entity may fulfil all the tax regulations
according to the provisions set by an entity to produce reliable and authentic financial figures.
PART B
Discuss delegations and budget accountabilities for implementation
There are three kinds of budgets prepared by Ed’s White goods firm by segregating
all their task responsibility among various departments in the business. Three budgets
prepared by the firm such as sales budget purchase budget and expense budget. Sales and the
revenue generated by the firm to increase overall cash inflow in the business concern and on
another hand liabilities imposed on an entity to know the actual position of the firm.
Decentralization method has adopted by the firm in delegating all its responsibilities among
all the workers working for the betterment of the business concern (Balaev, 2017).
Accountability has given along with the delegated to all the employees as they held
responsible for all the work duties assigned to them. Every budget need to be approved by the
middle and senior manager in the firm by posting their initials on all the budgets prepared by
an entity.
Develop written procedures for recording systems and documentation process in monitoring
and controlling activities.
Monitoring of the plan and controlling are two essential factors that help in improving
the entire performance of an entity. Budgets can be monitored by applying financial software
such as Systematic application software that tests the budgets and tests its accuracy. Through
this application all the budgets will be feeds into this system to check the effectiveness of the
data by testing the data using monetary as well as non-monetary approaches. Control can be
imposed by an individual by using dashboard in which activities of all the employees will be
tracked by the top management by keeping watch on the progress of the budgeting report. All
the constraints come in the path of the venture while preparing budgets can be identifying
through this approach. Transactions report generated by the firm which include all the errors
while feeding the transactions into the system as an individual’s performance can be easily
tracked.
5

Prepare risks management and contingency plans along with the policies
Risks and
contingency
Likelihood Risk Score
1= High. 2=Moderate
and 3= low
Ways to overcome
Clerical risks High 1 Custodian
responsibility
approach in which
work of one
individual is checked
by another individual
to identify fraud in
their work in its
absence
Financial risks High 1 This risk complexity
is depends upon the
nature and different
kinds of risks takes
places in an entity.
Lower profitability is
due to lower sales.
Risk of lower sales
can be reducing by
forecasting sales of
future period.
Policies for risks and contingency plans
Implementation of risks and contingency policies in an entity is based on all the
policies framed by the business concern. One of the implementation policy states that
feedback system has developed by the firm to get the views and opinion of all the target
audiences to tests the effectiveness of the plan executed by the firm. Feedbacks are prioritized
into positive and negative reviews to improve the condition of the venture in dealing with all
the problems.
6

Develop a policy and procedures to outline maintenance of financial performance
 Preparing income statements, financial positional statements and cash flow statements
on time.
 Checking transaction’s accuracy by matching the trial balance
 Preparing inventory records for safeguarding all the inventories in an entity
ASSESSMENT 2
Prepare a variance analysis between budgeted and actual figures
Particulars Budget Figure Actual Figure Variation
Total Sales $1623000 $111837 -1611163
Total Purchases $701400 $40605 660795
Total Expenses $402000 $41752.08 360247.92
GP $519600 29476.92 $490123.08
Demonstration of major differences
Budgeted sales are higher as compared to the actual sale which shows the deficiency
of the firm to generate higher sales and the revenue by an entity. Purchases and expenses
incurred by the firm are less than the budgeted figures are beneficial for the firm.
State the positive or negative discrepancy by giving 5 reasons for the same
Discrepancy in the financial parlance states the ability of an entity to portray its image in
front of the external business environment clearly. There are various discrepancies observed
in the business while preparing financial reports are mention below:
 Lower sales are due to lack of confidence of the consumers in the external market.
 Increasing sales prices diverted the interest of the customers from seller to another
seller
 Lower purchase observed in the variance analysis is due to just in time method
adopted by the business concern in which orders delivered to all the users without
storing in the warehouse.
 Lower purchase is due to ability of the firm to sell the goods and services easily.
 A lower expense is due to the controlling power of the firm in reducing all the
expenses by prioritizing into various categories.
7

Determine the effectiveness of cost budgeting techniques
Absorption costing is cost budgeting technique that considers all the costs incurred in
an entity such as fixed as well as variable costs considered by the firm in determining the
price of all the products sells by an enterprise (Jørgensen, 2017, May).
Give recommendations to correct the variances
It can be recommended to Ed White-good firm to increase different sources of income
to compensate the variation of budgeted and actual sales figure of the year 2014. Different
sources of income includes sub letting of business premises.
ASSESSMENT 3
Identify and evaluate 3 financial management software and assess its effectiveness on various
factors such as price, usability, features and functions, comp ability with other programs and
capability with other specialists.
Basis Net Suite Cougar Mountain
DENALI
Sage Live
Price $999 per month
license+$99
$275 per month+
$1999
$350 per month
Usability It is designed
accounting software
industries by offering
financial services.
This software has
specially designed
for start up
businesses.
This software is for
business
professionals
Features and
functions
 Web based
software runs
on internet
browsers.
 It provides
exporting
option to
CSV or IIF
 It provides
inventory
security and
data
reporting.
 Flexibility to
use mobile
accounting.
 It offers
multiple
reporting
templates.
 It provides
general ledger
customization
and separate
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files. ledgers.
 It gives
notification on
all
convenience
devices.
Compability with
other program
Web browser Windows, Linux and
Mac
It is compatible on
ipad and iphone.
Capability with
specialist
Manufacturing
businesses
Small businesses,
freelancers
Cloud hosted
It is associated with
US finance
compliance
management
Advantages  It is cloud
based
software.
 It can be
accessed from
all the
devices.
 Different
pricing plans
for different
users.
 Flexible
software
 Affordable for
all the users.
 It gives all the
services under
one package.
Disadvantages  Expensive for
small
business
 Cost of
execution is
high.
 Expensive for
small entity.
 It restrict
normal
individual in
using the
software.
Recommendations
It is recommended to an entity to use Sage Live financial management software as it
is affordable, higher features and compatible to run on various platforms as compared to all
other software’s.
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REFERENCES
Jørgensen, M. (2017, May). Software development contracts: the impact of the provider's risk
of financial loss on project success. In Proceedings of the 10th International Workshop on
Cooperative and Human Aspects of Software Engineering(pp. 30-35). IEEE Press.
Balaev, A. I. (2017). Factor Analysis of the Russian Budget System Revenues. Economic
Policy. 3. 8-37.
Lin, S., Pfeiffer, G., & Porter, D. (2017). Accounting Standards and Financial Market
Stability: An Experimental Examination. The Economic Journal. 127(605).
Minnis, M., & Sutherland, A. (2017). Financial statements as monitoring mechanisms:
Evidence from small commercial loans. Journal of Accounting Research. 55(1). 197-233.
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