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Investigating financial control for a new restaurant.

Extracts from this document...

Introduction

BTEC First Diploma Unit 3: Investigating financial control Contents Page Page 1: Introduction Page 2-6: Different Cost Page 6-13: Net Profit Page 13-16: Break Even Page 16-20: Cash flow Page 20-24: Recording transaction Page 25: Evaluation Page 26: Bibliography Page 27: Appendix Introduction This unit looks at the financial aspects of running a business. I will start by looking at profit and then investigate the point at which income equals expenditure, known as the break even point. It is also important that businesses carefully watch their cash flow. I will have to calculate the cash flow for a selected business and explain how a business can improve their cash flow. Budgets are another way in which businesses control their financial situation and I will have to draw-up a budget for the selected business. Finally I will look at the ways in which a business record transactions and ways of preventing frauds. Restaurant Ideas For this task I will be using the following scenario: "Warren Palmer wants to open a new restaurant in the Barnet area and has approached our business class for some ideas and advice as to what type of restaurant would be successful in this local area." BRAINSTORM These are my different ideas that I think the restaurant should be. Gambian Restaurants: Serving Gambian traditional dishes Takeaway service Multicultural restaurant: serving dishes from different nationalities BUSINESS NAME This is the name that I choose for the restaurant. Warren restaurant POSSIBLE SUPPLIERS These are the three suppliers that I have considered to supply Warren's restaurant with food Earth Natural Foods http://www.earthnaturalfoods.co.uk/ London Farmers' Markets http://www.lfm.org.uk/ The Fresh Food Group http://www.freshfoodgroup.com/ CHOSEN SUPPLIER I have chosen Earth Natural Foods because it is the most cheapest and they sell the highest quality of food products. Earth Natural Foods http://www.earthnaturalfoods.co.uk/ THE MARKET There are a total of 314564 people living in Barnet so because the restaurant is multi cultural, it could be a success because of the multi cultural people living in Barnet. ...read more.

Middle

Cash flow analysis is the study of the cycle of your business' cash inflows and outflows, with the purpose of maintaining an adequate cash flow for your business, and to provide the basis for cash flow management. Cash flow analysis involves examining the components of your business that affect cash flow, such as accounts receivable, inventory, accounts payable, and credit terms. By performing a cash flow analysis on these separate components, you'll be able to more easily identify cash flow problems and find ways to improve your cash flow. A quick and easy way to perform a cash flow analysis is to compare the total unpaid purchases to the total sales due at the end of each month. Cash flow Forecast Using the information given to me I am going to create a cash flow forecast. The table below shows the figure that occurs when Dave hasn't added new machinery into the Cash flow forecast. An overdraft allows you to borrow an agreed amount of money on top of your bank balance. An overdraft is different to a bank loan because with a bank loan Dave would have to apply to the banks each time he wants to have a new loan. I think that Dave should have an overdraft facility because if he runs out of money the payments coming out of his account may fail and he may be charged by the bank. With an overdraft he could still make payments from his accounts and this would prevent him from incurring a bank charge. It is a good facility to have because it is quick and easy to set up and once it has been set up it is a constant feature of the account. He also has to arrange a set time scale with the bank to repay the loan. With an overdraft there is no set time scale to repay the bank. ...read more.

Conclusion

This allows some of the following functions to perform: * Bar code readers can identify each product and its price, the total spend is calculated by the computer. * Stock record can be updated as soon as product is sold. This also allows low or high turnover stock to be identified. * Detailed receipts can be printed which provide the details or the good their bayed together with their price, this also includes the VAT, add card details and promotional messages. * Some large stores/supermarkets use the data to draw up profiles of regular customers so that they can mail them with information on promotions of their favorite products. Fraud Fraud is when someone attempts to gain an advantage by deception, for instance someone who exaggerates their qualification for a job. This table shows the different types of frauds that exist and the preventions that are taking. Example of Fraud Prevention measures Stealing money- Cash is easily accessible in businesses because customers pay in cash. Cash is very tempting to steal because if someone was walking with two bags of cash nobody wouldn't able to trace back at it. Stealing goods- This involves taking items of stock from a stock room or taking office consumables e.g. pens printer and etc without paying for them. Other forms of money theft- this involves gaining unlawful access to a bank account to withdraw money or deliberately entering false figures into accounts to get money. Sweetheart deals- Where staff treats their friend and not making her pay for any goods or giving her a discount. Identify theft- Where your identity is stolen from you and used as a way to obtain money, goods, credit cards and etc. Internet fraud- Where websites are hacked into and credit card details and other information are stolen. Embezzlement- Getting or using money that rightfully belongs to someone else. Card fraud- such as stolen credit cards which are counterfeit copied and is recorded by a special machine, and is later used to buy goods. ...read more.

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