Business functions - accounting finance

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  • Business Functions --> Accounting/ Finance 1
    • What is a budget?
      • A forward finance plan
      • An estimate of the income/ expenditure of a business over a period of time
      • Budgets can be for: income, profit, expenditure
    • Variance analysis
      • Favourable
        • Sales/profits > expected
        • Costs < expected
      • Adverse
        • Sales/profits < expected
        • Costs > expected
    • Benefits of budgeting
      • Provides a framework for allocating resources
      • Aid control and monitoring
      • Encourages managers to plam ahead
      • Provide targets which can be motivating to staff
    • Causes of cash flow problems
      • Too much stock
      • Poor or late payers
      • Seasonal demand
    • Improving cash flow
      • Increasing sales
      • Arranging an overdraft
      • Factoring

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