• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Cash Flow for The Sea View Hotel. Evaluate how using cash flow forecasts and financial recording systems can contribute to managing business finances at The Sea View Hotel:

Extracts from this document...

Introduction

BUSINESS COURSEWORK: FINANCE 3 AMY HEATH Task 1 Cash flow forecast for The Sea View Hotel: Task 2 Analyse the cash flow produced in Task 1, including the implications of the regular and irregular cash inflows and outflows for The Sea View Hotel: The advantages of a cash flow are that you can view how much money is going in and out of your business every month. The cash flow for The Sea View Hotel shows that they are in loss for the majority of the year. The inflow isn't good enough and to improve this they should raise the price of the hotel rooms and food. To raise their inflow they could advertise and do promotions to get more customers/revenue in. The outflows in some parts are big values, (the irregular cash outflows) which could be paid over time instead of all at once. They could reduce outflow even more by reducing the price of the food and utilities, and even change their insurers to a cheaper one. ...read more.

Middle

This is a bill for payment. When the customer receives the invoice it is checked carefully to make sure that it matches the GRN (Goods received note) and the prices match those quoted on the purchase order. This can be used if the supplier is trying to overcharge the customer. * Credit Note: Occasionally, there may be a problem because the goods supplied are incomplete, incorrect or damaged. Or an invoice may be disputed because the price is too high. If goods are returned or an invoice is incorrect then a credit note is issued. This is the opposite of an invoice and confirms that the amount on the credit note will be deducted from the customer's account. * Cash Receipts and Payments: Most business customers pay be cheque or electronically. In both cases there is no need to issue a receipt. These are only given to acknowledge the cash payments, which are rarely made by business customers. This is why they are often called cash receipts. This can be used for returning items as a proof of purchase. ...read more.

Conclusion

This can act as an early warning system. It can help you manage your finances in advance by looking at the previous years forecast and it can show you where to improve and where you did well. By recording transactions accurately you are cutting down on fraud which will help the business make more profit. You will be cutting down on fraud because you will have a paper trail that you can use to back you up if need be. Better stocktaking means they can order stuff that they need, rather than overstocking or under stocking items which wastes money. Cash flow forecasts can help businesses to spread payments out over a period of time, making it so there isn't one big dip one particular month. Disadvantages: Using a cash flow forecast to predict the businesses future can be risky as it is only a prediction based on previous years. Things such as a recession could happen and so the business will not get as much money as it did in previous years. This could mean that the business isn't prepared when they get a sudden dip in revenue and they could go bankrupt. ?? ?? ?? ?? ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Accounting & Finance section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Accounting & Finance essays

  1. Marked by a teacher

    Cash flow. A cash flow forecast is a document that predicts cash requirements in ...

    4 star(s)

    has loaned from a bank, made in sales and been charged to lease the assets of the business. The major source of income for the garden centre is the public, but for temporary money, the bank can loan money to you.

  2. Marked by a teacher

    cash flow

    3 star(s)

    and it will also shows us those months in which we had a positive cash flow (more cash inflows than cash outflows). It allows Down 2 U to prepare a cash flow forecast for the forthcoming year. A cash flow forecast is a document, which outlines the forecasted future cash inflows (from sales)

  1. Cash Flow Problem (Creative Letter)

    people who rent out the land may use it even after the expiration of the lease (by forgetting) and if you would need the land urgently, there would be complications. Since your supplier has increased prices by a large amount, I would advise you to change your supplier and find

  2. annual cash flow forecast

    didnt change and this is good for our business because we will be able to plan our cash flow. Task 2 b Regular in - and ourflows - This type of inflow is when the business offers customers discounts if they sign up to pay direct debit, which is a

  1. Business systems Babatunde Onaola - Identify and use planning, control methods in conjunction with ...

    If costs and benefits such as these are difficult to quantify in monetary terms, notes should be attached to the investment appraisal to highlight them (2)Produce a cash flow forecast, profit & loss account for the Engineering activity A cash flow forecast that allocates receipts and payments to months (or years)

  2. Management Accounting Report.

    profit nor loss (the point at which all the costs are covered). The break-even can be worked out by using: * Graph * Table * Calculation The break-even can help a business to make a decision on whether to make a move and expand the business or not.

  1. Free essay

    planning personal finances

    free withdrawals when 60 days' notice is given HSBC High interest savings for children save for their future Institution Saving accounts available What they are specialised for Abbey national Easy reach Anyone who needs fast access to their cash. Abbey national Put aside to make regular savings or make your money harder to raid and get more interest.

  2. Costs, Profits and Break-even Analysis.

    for each one you sell, you're selling plenty more to make up for it. However, say that when the firm cut its price the same amount (10%), the demand for their product only went up by 5%. This would mean that the price elasticity of demand was only 1/2.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work