Internal Control Essay

4. Organisation backgroundinkwell Limited is a manufacturer of re-cycle inkjet and laser t integrityr printer cartridges. inkstand Limited printer cartridge is widely applicable. The main commercial focus is on strong retail market that demand cheaper and greener productsinkwell Ltd has a bring together of small main suppliers that produce4.1 Inkwell Limited is a limited telephoner, established in 2003. The head office and Warehouse is based in Birmingham western Midland.4.2 Their business model is to offer a part exchange facility whereby customer either post used cartridge to the companys on the line shop or physically take them onto one of over 60 shops in the companys chain that are situated in all major UK cities, and many large towns. If customers do bring their old cartridge in they are then given a 10% snub against the cost of a replacement cartridge.4.3 Its mains mission is to save customers money by not compromising quality and at the same meter help break a greener e nvironmental 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 come 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 shop managers are responsible for their own staff by preparing rotas and ensuring adequate staff coverage for all of the opening hours of their shop.4.6 Finance, Marketing and gross revenue are the main departments In Appendix a there are a organisation Chart.5. Structure and Function of the accounting System at Inkwell See Appendix a for Organisation Chart5.1 Inkwell is a tall structure company. They are different levels of people, apiece 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 annual report, shareings with all banking and finance issues. Michael OPanye the Company Accountant, whos duties are producing the monthly management report, approving all payments to suppliers. However his main role is to manage the depart of the accounting technicians and clerks.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 recommend charges where needed. The main duties thats cover within the account department by others consist of sales and purchase ledger entries, preparing suppliers payment, payment allocation, money book entry, petty cash summary, cost analyst, bank reconciliation, payroll run and personal data up keep.6. Weakness and finding of the current s ystem6.1 A SWOT analysis has been carried extinct 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 undermentioned key weaknesses in the payroll process.6.2 System Integration Whiles the payroll is integrated with the personnel data system, allowing 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 paid The periodical hourly paid staff pay is calculated manually from a hebdomadally rota prepared by the shop managers. This situation is not sample its open to mistakes and potential to fraud. By simply installing online time clock terminals lets managers control where employees clock in/out from by setting up specific time clock locations and shift plannings 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 Management The payroll clerk is responsible for managing a weekly payroll Including calculating overtime worked and sales commission for over 60 shops, two separate monthly payrolls (the total employee is around 180) issues all statutory forms inevitable 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 modify the processes to make them more efficient should be taken advantage of. By installing an online time clock terminal can allow mangers to plan shifts automatically. It shrivel 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 integra ted. 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 honorable one days of training. By the company supplying training, the payroll clerk can perform more efficient and feel more confident.6.6 Commission All sales staff and shop managers recognise 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 jampack 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 four factors abstraction the main problems affecting the accounting function payroll. The commission to all shop staff is one of most obvious cost effective that could be salvag e 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 performance of the accounting system.6.8 Cutting the commission to just individual per shop would mean also the Less time spent preparing the figures for bonuses, more hours gain to do other Things