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contolling - Coggle Diagram
contolling
stock control
effective stock control:
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if too much stock: lower profits, obsolete stock, theft
if too little stock: loss of sales, loss of economies of scale, storage costs
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types of stock
raw materials, work in progress, finished goods, merchandise
financial control
cash flow forecast- financial (planned future and expenditure) helps to ensure the business can pay its bills before its due.
ratio analysis - used to obtain a quick indication of an organisations financial performance and state of affairs
budget allocation - business sets a budget for each department for a set period of time. Helps the firm to control spending in the different areas of the firm
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credit control: Many firms sell goods on credit i.e their customers (debtors) can buy now and pay later. Usually, the firm expects that the debtor will pay for goods within 30 days. Everytime a business sell goods or services on credit it runs the risk of incurring bad debts i.e not being paid in full
Setting up a Credit Control System: 1. Set Credit Limits 2. Check Customer Creditworthiness 3. Efficient Adminstartion 4. Debt Collection Procedure
Benefits on Credit Control: 1. lower risk of bankruptcy 2. Reduces bad debts 3. Increased sales and profits
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