Business Organisation and Accounting Flashcards
Chapter 1
Office definition
A centre for information and administration
Common areas/functions in an office
○ Purchasing
○ HR
○ General administration
○ Finance
○ Selling & marketing
Purchasing department function
○ Ensure that business purchases from suppliers providing the best overall deal: price, service, quality
○ Ensure only necessary purchases are made
Human resource department function
○ Hiring staff
○ Firing staff
○ Training staff
○ General welfare of employees
General administration department function
○ Secretarial support
○ Dealing with queries
○ Arranging matters (etc: rent of properties)
Finance department function
○ Sending invoices to customers
○ Receiving invoices from supplier
○ Payment of supplier
○ Receiving money from customers
Selling & marketing department function
○ Taking sales orders
○ Advertising
Organisation chart
A traditional way of depicting the various roles and relationships of the formal structure
What is organisation chart showing ?
A simplified and standardised way of showing :-
○ Units/Department divided - how they relate
○ Formal communication & reporting channels
○ Structure of authority, responsibility & delegation
○ If there’s any problem - excessively long lines of communication, lack of coordination between units, unclear areas of authority
Functional departmentation
Setting up department for people who do similar jobs
Geographical departmentation
Organisation is structured according to geographic area
Product/Brand departmentation
Group based on products/ product lines
Centralised administration
Many administrative tasks are being carried out at a single central location - (head office)
Decentralised administration
Administrative tasks are carried out at various separate locations
Advantages of centralised
○ Consistency
○ Decision are made at one point - easier to co-ordinate
○ Better control over operations - easier to enforce standards
○ Senior managers can take a wider view of problems and consequences
○ Decisions are made that benefits organisations as a whole - not just local office
○ Quality of decisions is higher (theorotically) - senior managers have skills & experience
○ Economies of scale available - reducing duplication, increasing efficiency, and lowering costs
○ Specialised staff can be hired
○ Duplication of services can be avoided
Advantages of decentralised
○ Local offices do not have to wait for tasks to be carried out centrally
○ No reliance on head office - self-sufficient
○ Problem at head office didn’t impact local office
○ Procedures tailored to suit local offices
○ People with knowledge of local situations made decisions
○ Opportunities for junior managers to take on responsibility
○ Greater continuity between functional & general management - junior can upgrade to senior more smoothly
○ Top managers are not overly burdened with local concerns
○ Improved controls, performance measurement & accountability
Business policy
- Ensure all staff follow procedures & best practices
- Employees are expected to read areas relevant to their functions
- Policy should be always readily available for easy reference
make sure policy doesn’t create inflexibility
Main types of transactions of a business
○ Sales
○ Purchases
○ Paying expenses
○ Paying employees
○ Purchasing NCA
Making sales
Sales in retail - Made on the shop floor/online
Sale in manufacturing organisation - Involve Sales & marketing function
How is sale made to existing customer
1) Doesn’t exceed credit balance !!
2) Sales person takes order
3) Pass order details to :
i) store department - despatch
ii) accounts department - invoicing
How is sale made to a new customer
More senior-level management involved
1) Credit status must be determined
2) Decides to proceed or not
Who initiates it?
Making purchases
Started by purchasing/store department
Which department paying employees
Large organisation - Payroll department
Small organisation - Accounting department
Payroll function job
- Determine gross pay
- Calculate statutory and other deduction
- Organise methods of payment to employees
