Controlling
Making sure the business stays on target
- Adequate stock levels.
Controlling minimum (buffer) stock and
maximum stock is very important to a business in order to have adequate stock
for customers yet keeping expenses (such as insurance, storage) down. Business should avoid over stocking as some
products may date.
A business could use a Just in Time (JIT)
system where stock is ordered as customers require it. A good relationship with suppliers is
essential for this system to work. This
system will avoid overstocking and will keep customers satisfied
- Controlling credit limits
A business must control credit given to
Debtors. It is important to take a
competitive advantage and offer credit; however a Business must control this by
doing credit check, seeking bank and trade references and setting credit
limits.
A business may employee a credit controller
to do credit checks, send invoices, send reminders and avoid Bad Debts
occurring.
- Customers seek quality
Long after price is forgotten quality is
remembered. Customers pay for quality,
thus a business must control the quality of its product / service. A business could implement Total quality
Management system to achieve this.
When Irish products reach high standard of
quality a business can apply for the Irish quality recognition mark – the Q
mark. The Q mark is a stepping stone to
achieving the ISO 9000 internationally recognised quality guarantee.
- Controlling finances.
A business must control its receipts and
payments. Business should plan its income
and expenditure and compare this to the actual results. If finances are controlled well there should
be a small variance between actual and predicted results. Good financial control is important to
investors who seek financial return on their investment.
A business can control finances by
preparing a cash flow forecast.
Estimating receipts (sales, VAT back, financial assistance) and payments
(purchases, Tax, general expenses).
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