11. Payment Vouchers
- Every payment (cash or cheque) made by the company should be done through a payment voucher.
- No payment should be made without properly prepared and authorized voucher.
- The voucher should contain details like date, receiver, amount, description and account to be debited.
- It must bear the signature of the authorizing person, the cashier and the receiver.
- Any supporting documents (bills, receipts, challans etc.) must be attached to this voucher.
12. Document Formats
- Regularly we should get verified the content and format of company’s documents e.g.
- Invoice
- Delivery challan
- Credit / Debit Note
- Receipt
- Payment Voucher
- Quotation / Pro-forma invoice
- Make sure that they contain the information required as per the current laws and regulations.
- Get them confirmed by the company Chartered Accountants.
13. Renewals
- Ensure that all the certificates, licenses, agreements, permits etc. are renewed well in time.
- Any lease agreements, contracts, Power of Attorneys etc. which need renewals or re-authentication are done so in time.
- The documents / cards must be kept at a safe place and their photocopies must be made kept ready, if required.
14. Forecasts, Targets and Budgets
- Regularly set sales, profit and/or production targets. Also, track the progress of these targets regularly and meticulously.
- Undertake a break-even analysis to determine what we need to sell before we make a profit.
- Develop a culture to get budgets prepared and followed by every department.
- Make sure our budget reflects and takes into account our sales, profit and production targets.
- Regularly review the budget vs. actuals variance report and make necessary corrections.
- Learn from the experience of the previous year’s forecast, target and budget to set the same for the current year.
15. Regular Reports, Reviews and Ratio Analysis
- The accounts department should be asked to regularly prepare an MIS report which gives information about all the important matters related to accounts and finance.
- The company must get prepared the final accounts (e.g. Profit & Loss Account, Balance Sheet etc.) periodically.
- The top management must review these reports and final accounts statements properly and regularly.
- These reports and reviews can help in identifying any emerging problems well in advance and in taking corrective actions if required.
- We should compare key ratios from our financial statements, such as working capital ratio, stock/inventory turnover ratio or profit per employee, to averages prevailing in our industry.
- The performance of the company in terms of profitability, assets/liabilities, profit margins etc. must be critically analyzed and targets for the next period must be set during such reviews.
(Expert advice to GROW your business wherever you are, whenever you want.
SMEBusinessGuide.com… https://goo.gl/E3pfoQ)
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