AAF044-6 Accounting and Finance Assignment Sample
Module code and Title: AAF044-6 Accounting and Finance Assignment Sample
1. Introduction
Introduction of the Organization
Sage Group PLC is the chosen organization for the report and the internal objectives of the organization have been discussed in the report to understand the budgeting system of the organization. Sage Group PLC is a UK-based multinational software organization that operates its business in more than 20 countries.
Providing Software Solutions to different sector companies is the primary feature of the organization and it is the main source of revenue that the company generates. Europe and America are the biggest markets where Sage Group PLC operates its business operations (Annualreports, 2022). Moreover, Sage Group PLC is the third biggest software technology company in the UK and has 6.1 million customers worldwide, as per the 2017 annual report. After delivering the successful project compilation, the Company is developing a budgeting system to manage the internal business operations.
Key resources in the Organization
Sage Group PLC is one of the largest software companies in the UK and they operate their business in different countries although the company maintains its resources to deliver accurate service to all customers. Providing software solutions is the main object of the organization and it is the most descriptive part of any sector in day-to-day business operations. This is the third largest technology company in the UK after Oracle and SAP.
There are different objectives that the company applies to the business operation to maintain the quality of the work and different business objectives can reduce overall business costs from the organization. “Tracking Digital Inequality” is the primary resource for the company (Sage, 2022). Data empowering people across the countries to run the business, develop skills, analyze the business berries, and ensure equal opportunities that can change life are the basic and primary objectives that Sage Group PLC follows in the business.
“Tackling economic inequality” helps the organization to grow the business and it increases “Economic Stability” in the business, which also helps the company to represent a fair chance toward the other company. Other than that, the company also helps to “Tackle the climate crisis” to reduce environmental damage and it also supports the SEMs to make the procedure safer and compatible. These are the potential objectives or resources that Sage Group PLC provides to the clients to develop a better business solution.
Management Issues and Challenges of the Organization
Sage Group PLC is a software solution provider company who is trying to increase its business operations and due to that reason, the company is expanding its business in different countries. Currently, it is operating in 20 countries and expanding the business, which developed many challenges to “Meet the needs for the organization expectation”.
“Developing the urgent workforce” is difficult for the organization, it can reduce the quality of the work, and clients will not be happy with the business. Other than that, HR administration is having issues of “engaging with individuals and satisfying their individual needs” (Sage, 2022). Other than that, “Customer demand is becoming more diverse and challenging to meet” and it is reducing the efficiency level among the employees.
A company’s goodwill can be hampered after delivering the wrong project and solution, which may affect the overall performance of the company. Moreover, Sage Group PLC is having issues regarding “Inventory control” and it can increase the production cost for the company. Outrage data souring can also reduce the profitability factor for the organization. These are the potential management issues that Sage Group PLC is facing which need to be solved to meet the company’s objectives.
2. Implementation of a Continuous Budgeting System for Sage Group Ltd
Concept of Continuous budgeting 400
Sage Group PLC is developing a continuous budgeting system in the business operation that might reduce the overall budgeting and it can reduce the overall cost for the organization. Continuous budgeting is a process of continually adding one month to the end of multiple budgeting and it is the key feature and concept of continuous budgeting.
Multiple period budgets can be made by implementing continuous budgeting to the overall budget system (Bhat, 2022). There are different objectives that the company applies to the business operation to maintain the quality of the work and different business objectives can reduce overall business costs from the organization. Continuous budgeting is the process that can only apply to a twelve-month budget so that the company can also have the full budget by the end of the year.
Creating a plan to spend the money is the main objective for Continuous budgeting. Budgeting spending can be smoother and more accurate after developing Continuous budgeting. Monthly spending will be recorded more clearly and accurately which can reduce the overall expenses of the company. Continuous budgeting is also called Rolling budget, this is the most promising budgeting system that Sage Group PLC can apply to their company, and it can help the company manage its business expenses.
Overall expenses and income can also be calculated after developing a Continuous budgeting program in the business operations. Quarterly budget systems can be updated to Continuous budgeting and outs the most effective budgeting system that companies use to tackle day-to-day business challenges. These are different advantages that Sage Group PLC can get after implementing the Continuous budgeting system.
“Analysis the daily spending”, the company is daily spending and activity-monitoring process can also be simplified after developing the system and it can reduce the over-budgeting issue for the company. Rolling budgeting or Continuous budgeting needs to be on a prepaid monthly basis, which reduces the need for financial details. “Planning and Control” (Quesado, 2018), Sage Group PLC can apply the company to reduce the manes mental cost and it increases the accuracy in the budgeting system due to the short format of budgeting.
Other than that, it has “less manipulation” in the budget due to no fixed cost. Removing the fixed cost can help the Sage Group PLC deliver better performance. These are the potential concept of Continuous budgeting although iot has some challenges and issues that companies can face vehicle implementing it in business operations.
Challenges that Company faces in implementing CBS
Inaccurate Data
Controlling the budgeting became difficult after implementing the process and it can also reduce the overall performance of the workers. Reducing workers’ motivation can also reduce the overall performance of the employee and it can reduce the productivity factor among the employees. Other than that, Inaccuracy in Data is the biggest issue with Continuous budgeting that Sage Group PLC can face after implementing it to company management (Lsbf, 2022).
According to Continuous budgeting, its collected list for all departments can be tricky and it reduces the quality of work, which increases the overall risk that might affect the production quality of the Sage Group PLC (Nikodijević, 2021). “Lack of Modifying”, modification is not applicable to this building system, which may reduce the personalization benefits and it can affect the budgetary system for the organization.
Overall growth can also happen due to personalization issues and it needs to be fixed by adding an accurate quarterly budgeting system to their overall budget. The individual can manipulate information and it is not an effective budgeting system for big multinational companies.
Collection of information
Most of the budgeting stem works on a yearly or quarterly basis; however, Continuous budgeting is the budgeting system that can only be worked on the monthly basis. Yearly budgeting can increase the scope for correcting the issues that may reduce the company’s strength. Continuous budgeting is the process that can only apply to atwelve-month budget so that the company can also have the full budget by the end of the year (Nikodijević, 2021).
Budgeting spending can be smoother and more accurate after developing Continuous budgeting. Monthly spending will be recorded more clearly and accurately which can reduce the overall expenses of the company. On the other hand, monthly budgeting can increase the issue of Bing and the executives of the organization get limited knowledge and resources to correct the issues of the budgeting. Company management needs to collect the departmental expenses on a monthly basis, which is difficult for the company executive and it can reduce the efficacy of the workers.
Time Consuming Process
Monthly budgeting is the most hectic and time-consuming budgeting process and it can reduce the overall performance of the empress. Collecting data on the monthly babies can be a hectic and time taking process for Sage Group PLC. Other than that, the company’s overall budgeting system can also be affected by the Continuous budgeting system, which Sage Group PLC needs to fix for better performance (Lsbf, 2022).
A company’s reputation can be hampered after delivering the wrong project and solution, which may affect the overall performance of the company. Furthermore, overall budget expenses can be increased which mostly reduce the overall profit margin for the business operations. The company can handle single month operation, however, it can affect the multiple month operation, and at the time of monthly budgeting, data accuracy can be compromised due to monthly process reports.
3. Three reasons for choosing cash worth today
This is the basic principle of all types of business that the majority is acquainted with the “time value of money”. Therefore, the economic principle of the company that states money is required to receive for the present day in spite of receiving it tomorrow. In other words, “received today is worth more than one received tomorrow”. Money is money and its value for every required company to manage the presumably preserved.
Cost Opportunity
It mainly refers to the ability to collect money in the business to invest the money instead of “simply spending” it on others (Khatib, 2021, pg.6). Hence, getting money at any amount today, it means that receiving money that one invested is acquired for interest later. Therefore, the collection of the principle is recoverable easily by the management.
Higher in the process of purchasing power
A company such as Sage Group Plc may get the power of representing the actual value of money in its management to the investor to attract them. These will reference the higher level of commodities, and services to the acquiring company (Hüffmeier, and Zacher, 2021, pg.4). Therefore, it may be admired to have a direct link with the inflation rate and there may be no occurrence of a secret trend that is rising.
Less risk in management
The process of collecting or receiving money today in the business in the place of receiving the day tomorrow refers to the low risk in the business (Global Young Voices, 2022). Hence, getting the money today shows that one already has it so there is no worry about the amount that the company acquires in the future.
Evaluation of sound strategy
The key survival of any type of business in the UK market is to implement a “well-formulated business strategy”, and “precise”. Therefore, the owner of Sage Group Plc is required to focus on the development and execution processes in the business and the contribution to its growth of the business (Emeritus.org, 2022). With the application of the Sound strategy in the business of sage plc, the company will be able to focus on the below-discussed points.
Strong Upper management
The knowledge of the industry, the experience of the top-level management, and the “overarching business plan”, are the key to formulating a strategy for the business. It made the organization the best focus on the interest of the business.
Saves money and time
The focus is to attract the right employees at the time of the investment only on the initiation of the marketing process (sjhemley marketing, 2013). The initiating marketing process that is supporting the overall business saves the company money and time. This will refer to the development of a “sound marketing strategy”, for the management. This will allow future marketing efforts that may be highly focused to not waste energy and time delivering a return on investment.
Reason for choosing investment with the shortest payback period.
A “payback period”, is the amount of time to earn that may back to the cost of an investment. The length of the necessity of the payback period on the process of investment is strongly considered before embarking. The occurrence of the longer period of project happening that is in the sage group plc, that long to the loss of money that negatively affected the cash flow of the business (Debitoor, 2022).
The selection of the payback period investment by all the company for the process of getting the proper financial position of the business is followed. This happens due to the ease to understand the formation of the business, and the straightforwardness to calculate the performance of the business. Furthermore, it is a risk considering process that prefers sage plc for upfront. So that it is possible to get a clear view in the business that may be quicker to assess whether to invest in the business or not to get the idea.
4. Main function of the Audit Committee
Countering corruption and fraud
The determination of different types of fraud and corruption will be done by the “Audit Committee”, in a business. The “local authorities”, have the responsibility for the efficient and effective stewardship of public money (democracy.swansea, 2020, pg. 7). Furthermore, the occurrence of the safeguard against the losses in a business due to the process.
The main role of the audit committee is to oversee the strategy of the authority to counter fraud by assessing whether the practice is recommended and meets and applying governance standards. Further, the key role is to “scrutinize the robustness of framework control”. According to Legislation, 2022, the “Companies Act 2006”, the audit committee of the company must recommend to the directors the appointment and connection.
Value for best value and money
One of the other roles of the “audit committee” is to focus on whether the overall approaches of the authority focus on the money value in aligning with the “governance objective” or not. Hence, the specific area that is connected with the various acts of the committee should be considered for the external audit (democracy. Swansea, 2020, pg. 6).
The opinion of the value of money will be set out in the processed “code of audit practice”, that is adopted by the bodies of the national audit. The assurance over the value for the money value should be required to focus on both of the arrangements that ensure the value for the progression and money to achieve the money value.
Members of the Committee
The “audit committee” members are operated during the year in accordance with the different principles of the [“Financial Reporting Council’s”] (“FRC”). According to the UK “corporate Governance code 2018”, the recommendation set out the guidance of the FRC on the Audit Committee. The “Audit and Risk Committee”, of the company“Sage Group Plc”, chaired by Mr. Bewas (sage, 2022). It has other members that are “independent non-executive directors” such as Ms. Court, Mr. D Harding, Mr. D Hall, and Ms. Anand.
Issues faced by the committee during the reporting year and suggestion
The chairperson of Sage plc faces the key matters at each of the committee meetings. At the certain type of meeting the committee met with the VP of assurance, and external auditor without the presence of the management (Sage, 2021, pg. 110). The key activity during the period of coved 19 was that the company faced risk, operation, and controls that show the effectiveness of further embedding, and internal controls.
There are a number of risks and issues discussed below that the company faces during the audit committee period in 2021.
- According to the audit report updates on the “regulatory, and legal framework”, there are the relevant areas of responsibility of the committee. Further, there is the occurrence of information security and cyber risk in the management by standing up with the EVP chief risk.
- The UK governance responded to the reforms to the corporate governance and audit report with the consideration of the “current internal control framework”.
- The summary of the audit report occurrence of the instant whistle blowing plan, and escalated incident of fraud faces together with the status of the investigation (Sage, 2021, pg. 111). Authentic Documents of the data that is provided by the different stakeholders for the adaptation. The managers for the proper authentic representation show the unauthentic document in the management.
5. Conclusion
The report has provided an overview of the “Sage Group Plc”, which is operating in the market of UK. There are different sections of the good inputs, and concern on the auth balance. The management has been facing various types of issues in the management, and occurrence of risk in the process of calculating business performance. The procedure for collecting data for the purpose of the auditing process required to maintain the company’s report in a proper manner.
However, the context sheds the light on the continuous budgeting system for evaluating the challenges and issues that sage plc faces. Hence, on the basis of the problem that is the short solution provided in the report for the betterment of the employees of the company. In terms of the effective and efficient management process of the company, there is the occurrence of the audit report made by the audit committee that plays a crucial role in the completion of the business requirement.
Furthermore, a brief discussion on both of the sectors that is the project and overall explained data with authentic documentation of the mentioned paper.
There is the occurrence of the explanations to determine the issues. It is concluded that the business has the application of a “payback period” in the management refers to the comfortable collecting of cash. Hence, the scenario of calculating the investment process by using the payback period refers to the projected return on the investment of the business for the number of months or years. Therefore, these may disregard the amount of interest that could be made for the purpose of the overall accuracy of the cash flow position of the business.
Recommendation
With the help of the research, it has been seen that the company is required to motivate their workers. It will help the company in making the improvement in the performance of the company. For motivating their workers, the company can provide training to them. It will help the workers in getting the knowledge regarding the job which they are doing and also increases their efficiency. With the research, it has also been seen that the company is facing the issue of the collection of inaccuracy in the data.
So, it has been recommended to the management of the company who is having the responsibility to collect the data needs to collect appropriate data which are relevant to the objectives of the organization of creating the continuous budgeting system. However, it has been seen that implementation of the continuous budgeting system is time consuming. So, it has been recommended to the company that the company is required to make the management responsible to track the performance of the company according to the time which has been decided by the company.
The company Sage Group PLC is required to make the implementation of the cash worthy because it will help the company in getting the opportunity regarding the cost, it increases the power of the company in the process of purchase and also help in reducing the rate of risk in the management of the company. The company is also required to have a sound strategy inside the company because it helps in making the upper management of the company strong and also helps the company in saving the time and money of the company.
Whereas the company is required to choose an investment with the shortest payback period because it will provide a positive effect on the cash flow of the company whereas if the company chooses the longer period of investment then the company can see a negative effect on the cash flow of the company.
Reference List
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