Business resources M2 Essays

Business resources M2 Essays Business resources M2 Essay Business resources M2 Essay It is very important for an organisation like Sainsbury to control its cost so that it can manage it financial resources effectively. The reason Sainsbury needs to controls its cost properly would be that it would end up where it would save money on expenses and increase it revenue. This will help the company increase its profits and this would allow the company to invest money if they required. The reason Sainsbury needs to controls its cost and budget properly is that it would save its money by having the right amount of stock in the shop floor and stock room then the company will have full benefit by selling those stocks and not holding up cash which could be used for other areas of the business. It is very important for an organisation like Sainsbury to control its cost so that it can manage it financial resources effectively. The reason Sainsbury needs to controls its cost properly is that it would save its money by having the right number of staff then Sainsbury would benefit as they would have cash available to pay for other expenses in the business. The reason Sainsbury needs to controls its cost properly is that it doesnt go over the budget which has been set by the company It is very significant for an organisation like Sainsbury to control its debtors properly and effectively then this would mean that the company would get its money owed paid back quickly and this would aid the company by having it money back from it debtors. This would mean that the company would have money available to pay it creditors and purchase stock. It is essential for Sainsbury to control its budget has it helps the business to determine whether they have enough money to fund operations, expand the business and generate profit. It is essential for Sainsbury to control its budget so that it has finances for the period of the budget. The budget will help Sainsbury reach targets and goals. It would also help to create motivation among the teams by having a plan this will help the company improves its overall performance. Most importantly it would help them to monitor and compare the performance against the budget which is the budget variance On the other hand, if Sainsbury do not manage its costs and budget properly and effectively then this would cause the company a decrease in its profits. The company might even end up in a situation where it cant pay for its expenses no more and this would lead the business to shut down. If Sainsbury do not control its cost and budget properly then this would mean that the company would purchase too much stock and the stock be held in the stockroom. This would then mean that the value of the stock would decrease. As a result this would increase the cost of the company expenses. Also this would mean that the company would be wasting money in a non beneficial area so if the company wanted to use the money in another area it wouldnt be able. Then again, if Sainsbury do not manage its costs and budget properly then this would mean that the company would not be collecting the money owed back in time to pay for their expenses and stock. So therefore this would mean that Sainsbury will have to borrow money in order to pay it s creditors and stock. As a result, this means that Sainsbury will have to pay interest in the money which they borrowed and will end up paying more money. If Sainsbury doesnt control its cost and budget properly then it wouldnt manage to assess and evaluate its finances. Also if Sainsbury doesnt manage to control its budget then it would find it difficult to reach its objectives and targets. Furthermore the staff wouldnt feel motivated as they wont have any real and obvious targets to reach. If a Sainsbury doesnt control its cost and budget then it runs the risk of spending more money than it is taking in or, even, not spending enough money to expand the business and compete. The problems which can arise if the costs are left unmonitored are that spending might be more than what is available. It is important for a company like Sainsbury to maximise income and minimise it expense. The other problems which can arise if the costs are left unmonitored are that the amount spend on overheads will be too much and this will decrease the profits which the business makes. In addition to that, the other problems which can arise if the budgets are left unmonitored are the targets may not be achieved so therefore it may be difficult to identify what was the cause. It will be difficult for neither Sainsbury to implement changes if the performances are nor being monitored. If the management are not aware of where the business is going therefore they may not use resources adequately. Furthermore another problem will be that too much stock may bought and this would mean that the stock would be left in the stock room and then when the stock goes out of fashion then the business will have to put discount on the stock. So therefore they will lose money on those clothes. Another problem which can arise is that the company the company may not keep track of they debtors and this means that the debtors are not paying on time. So therefore they might find it difficult to pay it creditors and might even need to borrow some money to purchase stock and the company will make a loss as they would have to pay an interest on the money borrowed.