Financial Accounting deals with recording transactions, keeping accounts and preparing the reports for management so that it can help them make decisions using their knowledge of their revenue and profits.
Managers of Finance will deal with working out what resources are needed and raising funds and loans for the company to pay for these resources. Payroll in the finance department keeps track of the amount of hours worked by employees so that they can calculate the pay & deduct taxes.
Keeping records of all financial transactions is one of the main functions of the finance department. They must count all the figures of sales to calculate how much profit or loss the business has made. Once they come up with a total they can then see how much tax the business will have to pay. The department helps the managers to make the right decisions. This function is important to Scott Bader because if they don't calculate whether the business is making profit or not then they won't be able to set proper targets because they won't know the progress they have made they also need to see that they are making enough profit to make sure that only 60% of it covers all their costs and the rest going to staff bonuses and charity projects. Finance won't be able to advise the managers as effectively either if these transactions are not recorded properly.
There is an Accounts department inside the finance department. Every business has to prepare accounts to show its financial situation during a year. It has to prepare a Balance Sheet, which records what a business owns and owes (its debts). It also has to prepare a Profit & Loss Account. This states the income, expenses, profit or loss of the business in the whole year. This function is also very important because they can become useful to different people for different reasons. For example, the 'Inland Revenue' can make sure that Scott Bader has paid the correct amount of tax. Suppliers can also confirm that Scott Bader will be able to pay its debts.
As Scott Bader does not have external shareholders these accounts are not too dangerous for the outside world to see they cannot be bought out and this gives them an advantage they can compete more ferociously because they know if problems do occur at least the business is still in the hands of the employees. Scott Bader does have to budget though; this is where they would set financial targets (the money the company aims to make and spend in the year).
The finance department supports other functional areas of the business. It has to pays debts and place orders of other departments inside its business. It tells the other departments, how much money is available to them and also gives advice. Such as if the 'Marketing and Sales' department of Scott Bader are going to spend money on new machinery that will make productivity higher and more efficient, then they would tell the finance department. They must make sure that departments don't over-spend. All the senior managers receive help from the finance department when they are making major decisions on expenditure because the finance department don't want them to make a huge mistake.
Human Resources. Human Resources manage the people within the business, by recruiting, training and retaining employees with the necessary skills to perform their jobs effectively it covers:
- Human Resource Planning (H.R.P).
- The employment and selection of new employees.
- Training and development of staff in the workforce.
- Performance appraisal. (To keep staff motivated)
- Disciplinary procedures. (So to make sure efficiency and high productivity is kept)
- Grievance dealings.
- Health and Safety issues.
- Looking after the employees’ welfare (a principle at Scott Bader)
- Dealing with the termination of contracts of employment.
Human Resource Planning is the procedure used in all companies and is used in Scott Bader (see diagram) it is used for forecasting for the business, for the future like workforce requirements. It looks at how many employees the business will need in the future, as well as the type of employee that will be necessary H.R.P. also ensures that the ‘right’ employee is in the ‘right’ job, to ensure maximum efficiency and effectiveness of the workforce. Efficiency is important when employing people in to a company like Scott Bader they are always looking to cut costs and be more productively efficient which means training or employing people with the right skills for the job entailed,
This means that the business must make estimates of the number of workers that it will need at all levels in the business in the future. This can be done by using past data (e.g. if the workforce has grown at 4% per year over the past 3 years, this may continue over the next 3 years if the business is growing). It could also be done by, analysing the levels of customer demand and sales expected because more employees may be needed to take customers orders or delivery and certain other jobs. Some of the workers may be near retirement age or they may have to take into account transfers the business would have to employee the right amount of people for the amount leaving. New technology or a new production technique may be used where more machinery is needed this would mean the company will not require these employees that the machinery has taken over. This would be a difficult issue for Scott Bader as getting rid of employees would be against the objectives and principles of their business (looking out for the welfare of their employees.) These employees have the advantage of already knowing about the systems and the routines of the business, but they would still require the relevant training and development in order to prepare them for their new, more senior positions.
Human resources have to train new employees so that they are up to scratch with the skills needed for the job. However, training is not limited to just the new employees of a business. Training courses could be targeted at all employees in the business at all stages in their career (e.g. management training courses, training on how to use new machinery and technology). They need to train their employees because training can improve employee productivity. They can create a multi-skilled, flexible workforce which makes them more desirable workers a disadvantage of this is that the workers my want a higher wage because new skills have been learnt and they could argue that other firms would pay them more for the new skills. Training can increase the levels of job satisfaction and motivation of the employees it increases the chance of promotion, which would make them, work harder.
The research and development and marketing departments are linked and have to work together in a business to advertise and create a product, which consumers want. The research and development is the department that tries to find new and/or better ways to improve the product or service they do this by asking customers questionnaires and taking surveys about certain areas of the product. Customer satisfaction is important to a business because it makes customers loyal which means they will stay with the business and become regular customers.
Scott Bader’s Health and Safety has an extra meaningful ethos, it doesn’t just keep the employees safe and up to date on the fire procedures etc but Scott Bader's health and safety targets in the UK are focused on through local objectives at departmental level and joint working between management, responsible care representatives, contractors and employees.
Scott Bader aim: -
- “To be accident free within the company and in the use of our products
- To ensure we do not adversely affect the health of any employee, neighbour, visitor or customer by our activities or products
To support the chemical industry's Responsible Care programme
