Short and long term consequences of not addressing these issues? Essay Example
Short and long term consequences of not addressing these issues?
There are short and long term consequences that will arise due to bad records keeping in a business. Every item in the restaurant should be tracked because of budget and taxes concerns. The restaurant should have a budget that has been put in place.
The short term of not having good records keeping in a business can result in the restaurant exhausting exhausting its budget and spending more than is coming into the business in term of revenue. This can result in problems with payroll, suppliers, utilities, and more. The brand and reputation of the restaurant can be tarnished if any business problems arise, especially when it comes to employees payroll. Failure to pay worker in the restaurant can result in legal redress.
The long term consequences of not having good record keeping may force the restaurant to file backruptcy or shut it doors. Bad recording keeping will reflect poorly on the restaurant and words gets around fast.
Immediate financial management requirement
. Because the restaurant will need to supply information regarding the business to a number of agencies including the business lenders, municipal tax departments, internal revenue service. Deepika, 2014)The immediate financial management requirement is to start records keeping at the restaurant in order to be compliance (
Secondly, good records will help the restaurant make sound decision with regard to the business (Nobanee and Abraham, 2015). Having accurate, up-to-date business records is one of the best tools a business can have when choosing where to focus their management effort in the future.
What procedures will help to address these requirements
There is a two procedure that can be utilized in record keeping. It can be done through manually or electronics or both. A system for collecting sales, paying suppliers, employees and taxes correctly, and on time should be part and parcel of the restaurant operations (Nobanee and Abraham, 2015). The restaurant might choose to operate an electronic or manual financial record keeping system, but regardless of the format that has been chosen, the system should be easy to understand, simple and accurate.
The steps that are involved in the accounting process
There are four steps that are required for transaction in the accounting process will include:
. For example recording the receipt of cash from its customers. Deepika, 2014)Identify the transaction. Firs the restaurant will determine what kind of transaction it should be (
Prepare document. There are many business documents that will be needed to be prepared in order to initiate the transaction, for example giving a customer a receipt or an invoce from a supplier.
Identify accounts. Every transaction should be recorded in an account, such as expense, revenue, liability, asset. The restaurant should identify which account should be used to record the restaurant transations.
Record the transaction. All the transaction in the restaurant should be recorded in the accounting system. This should be done either with an online standard transaction form or a journal entry.
The types of information that will be provided to third-parties
When the restaurant want a business loan from the financial institution, the following document will be required in order for the loan to be granted. These documents will include: past balance sheet, cash flow, collateral etc.
Point of Sale systems
. Frazier, 2013)(. In addition, receipt or invoice printer will be also be integrated into the restaurant business in order to keep track of the sales in the business Frazier, 2013)(Mobile POS technology helps remove the need for wired point-of-sale equipment, offering lower-cost devices and versatile applications to improve the way restaurants do business . (Nobanee and Abraham, 2015). Mobile point of sale will be integrated into the business Frazier, 2013)There are a lot of point of sale systems that can be used at the restaurant, including barcode scanners, electronic cash drawers, credit card readers, receipt or invoice printes etc (
.The main advantage of this approach is that the competitive situation is taken into accountDeepika, 2014)Competition based pricing review will be used. This approach will use data on competitive price levels or observed action of actual or on anticipated or potential competitors as a primary source to determine appropriate price levels (
How budget will be monitored
. Regular monitoring of the restaurant budget will help to: Deepika, 2014)Reconciling accounts on a regular basis will help to manage the restaurant money and ensure that expenditures and revenues are within appropriate limits and guidelines(
Ascertain that revenues have been received.
Confirm the availability of project funds as needed.
Ensure that costs are consistent with the project schedule and incurred between the start and stop dates of the project.
. Newswire. «Restaurant POS 3-Step Purchase Process»Frazier, Bob (October 16, 2013).
. 2014February 15, Retrieved
. International Research Journal of «MANAGING BUSINESS FINANCE»Deepika (2014).
Management Science & Technology.
Nobanee, Haitham and Abraham, Jaya (2015). «Current assets management of small enterprises».
Journal of Economic Studie.
More Important Things