Small business management 5e by byrd sbmchap014

“…the process of ensuring that organizational goals organizational goals are achieved.”... Set Standards Units Consumer/Produced  Standard Hours Per Unit  Miles Per Gallon  Price

Budgeting And Controlling

Operations And Taxes

 Small Business Control

 Types Of Budgets

 Obtaining Information

& Ratios

 Taxes & Tax System

 Record Keeping & Tax Reporting

“…the process of

ensuring that organizational goals

organizational goals

are achieved.”

Set Standards

 Units Consumer/Produced

 Standard Hours Per Unit

 Miles Per Gallon

 Price Paid/Charged- Price Per Unit

“…a detailed statement

of financial results expected for a given

future period.”

Cash Flow Budget

Plan Daily/Weekly Cash Needs

Plan Monthly Cash Needs

Prepare For Cash Flow Crisis

• Establish/Maintain Good Credit

• Set Aside Funds To Earn Interest

• Schedule Payments

• Keep Fixed Costs Low & Tie Variable

Costs To Revenue

Cash Budget Format

Budget Actual

Expected Cash Receipts $$$$ $$$$ Expected Cash Payments $$$$ $$$$ Cash Balances $$$$ $$$$ Cash- Capital Investment $$$$ $$$$

Cash Balance

Beg Of Month- Balance

+ Total Cash Receipts

- Total Cash Payments End Of Month- Balance

Budgetary Control

“…the system of budgets used to control

a company’s financial

activities.”

Credit/Collections Control

 Identify Slow Payers

 Investigate Customer’s Ability

& Willingness To Pay

 Monitor Past Due

 Write-Off Uncollectibles Steve Cole/Getty Images

“…a formalized examination and/or

review of a company’s financial

records.”

Types Of Audits

Financial Internal

Operations

 Compare Actual vs Standards

Jacobs Stock Photography/Getty Images

Causes Of Poor Performance

“…relationships between two or more

variables.

Ratio Comparison Values

Financial Ratios

Profits Satisfactory?

Net Profit To Owners’ Equity

Net Profit To Net Sales

U.S Tax System

Determines Taxes & Who Will Pay

Collection Of Taxes

Internal Revenue Service-

www.irs.ustreas.gov

Indirect

Direct

Selected Direct Taxes

Types Of Taxes

Property

Taxable Income

“…total revenues minus deductible

expenses.”

Cost of Goods Sold

& Inventory Valuation

Owners’ Personal Taxes

 Salaries & Bonuses Withdrawn

Credit vs Debit Card Use