Analysis of possible business problems: 2
Supervising responsibilities: 2
Stock security: 2
Trusting employees/wages: 2
Division of Duties: 2
Personnel policies: 2
Safeguarding cash on premises: 3
This report has been commissioned to produce an assessment of Jenny Juicy Fruits business for prospective purchasers of the ongoing concern of not making the profit it should for the amount of stock that’s been turned over.
The report intents to resent an overview of the past performance of Jenny’s business in the past accounting period and further beyond to consider different control options that could be implemented to increase the business profits.
This report will focus on these main areas of analysis:
Effectiveness of management policies
Controls recommended for the business improvement of profit
Analysis of possible business problems:
University students are certainly a targeted area of employment as they are often in need of money and will work hard for it. Although this being said, it is also a risk because statistically speaking, they are more likely to snatch some extra cash or stock without the manager knowing if you are leaving them in charge of cash or stock.
By letting the 10 students unload and load the stock, this could be a probable time when some stock may go missing by falling, being misplaced or being stolen if you are not supervising this task. Even trusting all your students to sell items to clients and safeguard stock is quite risky. Your employees could be selling to friends for discount prices, or giving away stock for free.
Collecting storing money with all 10 of your employees is a huge risk especially of the employees have only just started the job, haven’t proven trustworthy or are having financial struggles themselves. Giving them the responsibility to hold onto large sums of cash is a serious temptation to any employee, especially if they may not be happy with what they are getting paid.
Division of Duties:
The duties of a personnel should be separated so that the work of one employee acts as a check on the work performed by another. For example, In this case, you should only have your most trusted employee(s) in charge of collecting and holding onto money, another in charge of keeping track and recording sales, the dispatch of goods sold by another. By following this procedure, any inaccuracies should be located and picked up on by at least one of the employees so that the fault can be determined and who is responsible.