Internal Control Essay

4. Organisation backgroundinkwell Limited is a manufacturer of re-cycle inkjet and optical maser t hotshotr printer t wizard arms.inkwell Limited printer cartridge is widely applicable. The principal(prenominal) commercial focus is on strong retail market that contain cheaper and greener products inkstand Ltd has a couple of sm whole main suppliers that produce4.1 Inkwell Limited is a limited company, established in 2003. The head say-so and W arho drill is based in Birmingham West Midland.4.2 Their business model is to every(prenominal)ege a part exchange facility whereby customer either posture used cartridge to the companys on the line give away or physically take them onto one of over 60 discloses in the companys chain that are situated in all major UK cities, and many large t give births. If customers do bring their old cartridge in they are then given a 10% price reduction against the cost of a replacement cartridge.4.3 Its mains mission is to execute customers mo ney by not compromising quality and at the same meter care ensure a greener environmental future by better use of inkjet and toner cartridge.4.3 Inkwell is a company, mainly owned by shareholders. The managing director own the most numbers of share, while some(prenominal) the sale director and the finance director own equal shares.4.4 The three directors and the company accountant are the main decision makers in the company with the help of managers and supervisors.4.5 The expose managers are creditworthy for their own staff by preparing rotas and ensuring adequate staff reportage for all of the opening hours of their shop.4.6 Finance, Marketing and Sales are the main departments In adjunct a there are a organisation Chart.5. bodily mental synthesis and Function of the accounting System at Inkwell See Appendix a for Organisation Chart5.1 Inkwell is a tall structure company. They are different trains of people, each(prenominal) level is control by the level above. This very common of such a big organisation where each level is centralised.5.2 The accounting function is a small section of Inkwell Limited. It consist of Anil Gupta as the Finance Director who his fully responsible for all finance, legal and accounting procedures and systems. This in tail producing the company one-year report, dealing with all banking and finance issues. Michael OPanye the Company Accountant, whos duties are producing the monthly management report, approving all earningss to suppliers. However his main parting is to manage the naturalise of the accounting technicians and shop shop assistants.5.3 Alex Fox, account technician compiling this report, have worked for Inkwell for the past 6 months reviewing the companys systems and procedures pin pointing any cheer charges where needed. The main duties thats covered within the account department by others consist of sales and purchase ledger entries, preparing suppliers payment, payment allocation, cash book entry, petty c ash summary, cost analyst, bank reconciliation, paysheet run and personal data up keep.6. Weakness and finding of the veritable system6.1 A tog up analysis has been carried out on the current accounting function in Inkwell showing the Strengths, Weaknesses, Opportunities and Threat (Appendix ) From the SWOT analysis it can be seen that there are the following rouge weaknesses in the payroll process.6.2 System Integration Whiles the payroll is integrated with the force-out data system, granting them to talk to one another, information could be sent from one application to the other, it is not been used to its full potential due to time consuming caused by lack of experience and knowledge6.3 Hourly compensable The weekly hourly paid staff pay is calculated manually from a weekly rota prepared by the shop managers. This side is not ideal its open to mistakes and potential to fraud. By simply facility online time clock terminals lets managers control where employees clock i n/out from by setting up specific time clock locations and shift homeworks web-based time clock software gets rid of the need for expensive stand-alone equipment while streamlining the process of time sheet management allowing the payroll clerk to take work data direct to payroll.6.4 Time counsel The payroll clerk is responsible for managing a weekly payroll Including collusive overtime worked and sales rush for over 60 shops, two key out monthly payrolls (the total employee is around 180) issues all statutory forms required by HMRC, and the annual tax returns, updating and maintaining the personnel database. Managing a vast work load is very difficult and any possible ways of ameliorate the processes to make them more efficient should be taken advantage of. By installing an online time clock terminal can allow mangers to send off shifts automatically. It reduce the time spent calculating individual time sheets and allow the payroll clerk the information direct to payroll.6 .5 Knowledge The payroll clerk is responsible for the both the payroll and the personnel database which is integrated. As the payroll clerk only had one-day in house intensive training course on the system therefore the payroll found it difficult to get to grips with both the payroll and the personnel data system after just one days of training. By the company supplying training, the payroll clerk can perform more efficient and feel more confident.6.6 centering All sales staff and shop managers earn a commission of 2% each on the first 4000.00 of sales per month, and 5% on any sales over that figure, this is based on for each shop rather than the individual. Inkwell Ltd have over 60 shops, with 3 or 4 employee per shop with annual turnover of 16 million chock up would suggest the average amount per shop per week is 5,128.00. Every shop staff including managers would be paid commission each month6.7 These quadruplet factors outline the main problems affecting the accounting func tion payroll. The commission to all shop staff is one of most obvious cost good that could be saved each month, due to weekly intakes from each shop over 5,000.00. Not only would Inkwell save a great deal of money which in turn could be sent on other things such as improving the executing of the accounting system.6.8 Cutting the commission to just individual per shop would incriminate also the Less time spent preparing the figures for bonuses, more hours gain to do other Things