Assessment Tasks and Instructions

Student Name
Student Number
Course and Code
Unit(s) of Competency and Code(s) SITXFIN005 Manage physical assets
Stream/Cluster
Trainer/Assessor

Assessment for this Unit of Competency/Cluster Details

Assessment 1 Short Answers
Assessment 2 Project
Assessment 3
Assessment conducted in this instance: Assessment 1 2 3

Reasonable Adjustment
1. Has reasonable adjustment been applied to this assessment?
No No further information required

Yes Complete 2.
2. Provide details for the requirements and provisions for adjustment of assessment:

Student to complete
My assessor has discussed the adjustments with me
I agree to the adjustments applied to this assessment
Signature Date

2nd Assessor to complete

I agree the adjustments applied to this assessment are reasonable
Name

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 Signature Date
Assessment Guidelines
What will be assessed
The purpose of this assessment is to assess your ability to complete tasks outlined in elements and
performance criteria of this unit in the context of the job role, and:

 develop a plan for the acquisition, maintenance and replacement of at least three different types of
physical assets listed in the knowledge evidence
 demonstrate procedures to:
o monitor the utility of above assets to meet business needs
o provide regular financial reports on the assets
o record formal and informal customer and staff feedback
o integrate day-to-day condition reports
o schedule internal or external inspections or audits
o schedule management reports
o develop and maintain a current register for the above assets.
Place/Location where assessment will be conducted/Timeframes

Resource Requirements
Refer to the Assessment conditions attached to the Mapping Document located in the teacher support tools
folder or the “Assessment Conditions” for this unit in the SIT 1.0 Training Package.

Computer, Internet Access, financial data, organisational procedures relevant to the organisation for which
physical assets are managed and to be acquired.

Instructions for assessment including WHS requirements

The project for assessment 2 consists of 3 parts, Part A, B and C

For Part A
you are required to develop a resource acquisition plan for the acquisition of 3 different resources from the
following main categories:

 buildings
 computer systems
 equipment fixtures, fittings and furniture in one of the following:
o accommodation establishments
o commercial kitchens
o restaurants and bars

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 o storage areas
o tourism, hospitality and event offices
o transportation depots
 gardens
 pools
 rides and games
 vehicles
 vessels

For Part B
you are required to develop an asset register which needs to list the details for the 3 new physical assets you
have determined in Part A. You must include the maintenance requirements and schedule of maintenance for
each asset.

For Part C
you are required to develop a resource management strategy which provides details on how the efficiency of
each asset is monitored

Statement of Authenticity
I acknowledge that I understand the requirements to complete the assessment tasks
The assessment process including the provisions for re-submitting and academic appeals were explained
to me and I understand these processes
I understand the consequences of plagiarism and confirm that this is my own work and I have
acknowledged or referenced all sources of information I have used for the purpose of this assessment
Student Signature: Date: / /201

This assessment:
First Attempt 2nd Attempt 3nd Attempt Extension – Date: / /

Part A Satisfactory Not Yet Satisfactory

RESULT OF
Part B Satisfactory Not Yet Satisfactory
ASSESSMENT
Part C Satisfactory Not Yet Satisfactory
Feedback to Student:

Assessor(s)
Date: / /
Signature(s):
Student Signature Date: / /

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Assessment 2

The project for assessment 2 consists of 3 parts, Part A, B and C

Part A

Requires you to develop a resource acquisition plan for the acquisition of 3 different resources from the
following main categories:

 buildings
 computer systems
 equipment fixtures, fittings and furniture in one of the following:

o accommodation establishments
o commercial kitchens
o restaurants and bars
o storage areas
o tourism, hospitality and event offices
o transportation depots

 gardens
 pools
 rides and games
 vehicles
 vessels

Part B

Requires you to develop an asset register which needs to list the details for the 3 new physical assets you have
determined in Part A. You must include the maintenance requirements and schedule of maintenance for each
asset.

Part C

Requires you to develop a resource management strategy which provides details on how the efficiency of each
asset is monitored

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PART A – Acquisition Plan

Task:

You are required to choose 3 different physical assets, relevant for an organisation in the Tourism, hospitality or
event industries, which may include any of the following:

 buildings
 computer systems
 equipment fixtures, fittings and furniture in one of the following:

o accommodation establishments
o commercial kitchens
o restaurants and bars
o storage areas
o tourism, hospitality and event offices
o transportation depots

 gardens
 pools
 rides and games
 vehicles
 vessels

1. Provide an overview of the business activities of the organisation relevant to the physical assets selected.

Three physical assets which choose are

1. Buildings
2. Vehicles
3. Kitchen Equipment’s

Business activities of organization for management of Buildings

Building maintenance calls for routine inspections and proper upkeep of building services, such as the
maintenance of

 A/C

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  Lifts
 Automated fire detection and suppression systems
 Emergency evacuation system

Business activities of organization for management of Vehicles

 Asset management includes the overseeing of all cars

 Plant machinery
 Heavy goods vehicles or small commercial vehicles that are owned
 Vehicles that are on leased or hired by a company.
 Replacing vehicles and equipment at the optimum time helps support your company's overall
productivity, efficiency and profitability.

Business activities of organization of Kitchen Equipment’s

To do a proper check and balance in the kitchen on following items

 Food storage
 Cooking and serving,
 Clean-up
 Planning/messages
 Eating.
 Activity selection
 Activities that are classified and grouped

2. List the purpose of the acquisition or replacement of the physical assets, providing detailed information
what informs the decision to acquire these new assets.

Purpose of the acquisition or replacement of the physical assets are:

 Assets have outlived the lifespan for which they were initially intended.
 The Old Asset's Repair Cost exceeds its Purchase Cost.
 Failing to replace them has resulted in expensive maintenance costs as well as significant energy use.
 Failing to replace them has increased the likelihood of mishaps and disasters.
 The term "sunk cost" refers to a cost that has already been incurred and cannot be recovered in
economics and corporate decision-making. Organizations try to hold onto their surviving assets till the
end of their remaining useful lives if the sunk cost of the current asset is a sizable sum.

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3. Write an overview of specifications for each asset which clearly outline what requirements each asset needs
to fulfil in terms of capacity, performance, size, location requirements and maximum budget for each or for
the overall budget parameter.

Building.
Capacity:
Capacity is the maximum level of output that a company can sustain to make a product or provide a service and
the capability is the measure of the ability of an entity to achieve its objectives, especially in relation to its
overall mission. Building should be spacious enough to fulfil the requirements.

Performance:
The performance of the asset is the ability to provide the required level of service to customers. Generally this
can be measured in terms of reliability, availability, capacity, and meeting customer demands and needs.

Size:
At least 20 bedrooms with modern facilities
Spacious parking for customers
Dining area
Reception
Bathrooms

Location
Nice location easily reachable with transport facilities and good weather conditions.

Budget:
Buildings or real estate are occupying greater part of total budget.

Vehicle:
Right now, our delivery service requires a minimum of 5 food vans. $50,000 has been set aside for the vehicles.
To ensure that the food stays hot or cold as needed, it should be a van with a temperature control installed.

Commercial kitchen equipment’s:

It ought to have a combination oven, two deep fryers, two hot plates that can stand alone, a six-burner gas
oven, a sizable walk-in refrigerator, etc. To make clean-up simple, there should be enough of prep room, under-
counter refrigerators, and a pass-through dishwasher. The allocated spending amount is $100,000.

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4. Obtain 3 prices or quotes from different suppliers or sources for each asset. Attach the correspondence and
final quote received for each asset to this project.

Vehicles

Quote 1: $8,690 Quote 2: $9,000 Quote 3: $5,990

Buildings

Quote 1: $70,000 Quote 2: $65,000 Quote 3: $52,000

Commercial kitchen
Quote 1: $80,000 Quote 2: $75,000 Quote 3: $95,000

https://www.gumtree.com.au/s-ad/jandakot/business-for-sale/restaurant-in-the-heart-ofnorthbridge/
1158052754

https://www.gumtree.com.au/s-ad/hillarys/business-for-sale/restaurant-for-sale/1158088950

https://www.gumtree.com.au/s-ad/joondalup/business-for-sale/cafe-restaurant-for-salejoondalup/
1163838782

https://www.gumtree.com.au/s-ad/maddington/cars-vans-utes/2010-mitsubishi-express-mintcondition-free-1-
year-warranty/1163623225

5. Contact a financial institution and at least 2 different suppliers and obtain information on 3 different
financing options available and costs (attach copies of your correspondence).

Financial institutions:

Financial institutions such as banks, building societies and credit unions offer a range of finance products with
both short and long-term finance solutions. Some products include
 Business loans
 lines of credit
 Overdraft facilities
 invoice financing, equipment leases and asset financing.

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Grants:

Projects involving renewable energy and energy efficiency are occasionally funded by grants, repayable grants,
or program-related investments (PRIs) from foundations, governments, and other sources. A grant is a straight
donation (and is not regarded as a loan or debt), whereas a repayable grant has a condition that the donor be
reimbursed for the grant's principal. A PRI is a relatively new structure in which the donor offers a loan with an
interest rate substantially lower than the typical market rate. As long as the PRI complies with specific IRS rules,
the donor may count the PRI as a charitable donation. Each programme has its own target audience and
overarching objectives, and it is offered by a range of local, regional, and national organisations.

Suppliers:

Most suppliers offer trade credit that allows businesses to delay payment for goods. The terms often vary and
trade credit may only be offered to businesses that have an established relationship with the supplier.

6. Calculate the finance variants offered to you and determine the best options for each asset. Your options
need to include potential factors for depreciation, consideration for technology changes and financial
impacts on the organisation and financial aspects for which you will seek specialist advice. (Your
depreciation calculations must consider the current regulations published on the ATO website).

By using the ATO website for the depreciations calculation: the results are given below.

Buildings

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Vehicles

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Commercial kitchen equipment’s

7. Based on your calculations in Q.7, explain the official process that now needs to be followed to finalise the
acquisition of each asset. This may include processes in your existing workplace or common industry
standards and needs to provide:
 details for detailed specifications,
 legal contracts,
 requirements and documentation applicable to different acquisition and financing methods,
 preparation of documentation for disposal of assets that are being replaced including tax
obligations.

The process of organising and inspecting physical resources while keeping in mind their importance to the
government is known as resource securing. An abnormal level of administrative intrigue is necessary for
effective resource management, and the worry must continue the entire time the benefit is retained in
government custody. The main objective of benefit administration is to find the least expensive way to
secure, use, sustain, and transfer benefits in accordance with programme objectives. Therefore, physical
asset management is the planning, acquisition, maintenance, and transfer of (physical) resources while fully
adhering to all applicable legal requirements, strategic directives, and regulatory restrictions.
Effective implementation of the principles of asset management will address programme costs in terms of

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 Maximising the service potential of existing assets
Lowering the overall cost of owning assets through the use of life-cycle costing techniques
Ensuring a sharper focus on results by establishing clear accountability and responsibility for assets.
Reduced demand for new assets by adoption of ‘non-asset’ solutions.

Preparing Terms of Reference (TOR):

To help the consultants prepare their bids, the TOR must explicitly state the objectives, goals, and scope of
the assignment as well as provide background information (such as a list of current relevant research and
basic data). If knowledge transfer or training is a goal, it should be clearly stated together with information
about how many employees will be instructed, among other things, so that consultants can calculate the
amount of resources needed. The scope of work (TOR) must specify the services, surveys, and results that
are required to complete the assignment (for example, reports, data, maps, surveys).

Financial Evaluation
An asset purchase agreement (APA) is used which is an agreement between a buyer and a seller that finalizes
terms and conditions related to the purchase and sale of a company's assets A capital asset is an asset retained
by an enterprise for the purpose of earning revenue. A capital asset is not intended for sale in the ordinary
course of business.

Capital assets include things like:

motor vehicles
manufacturing machinery
office equipment
Land and buildings.

If you sell, transfer or otherwise dispose of a capital asset, and you're registered or required to be registered for
GST, it's generally a taxable sale and you need to account for GST on the sale. You must report the payment (or
other consideration) you receive at G1 (total sales) on your activity statement for the relevant tax period.

Reference:
https://www.ato.gov.au/Business/GST/In-detail/Rules-for-specific-transactions/Business-assettransactions/GST-
and-the-disposal-of-capital-assets/

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Part B – Asset Register

Task:

1. Develop an asset register which lists the 3 assets determined in Part A. Your asset register needs to include
the following details:

 Asset Details
 Asset description/model/type
 Serial Numbers
 Purchase date
 Cost
 Depreciation amount (from when you undertake this assessment to the end of the financial
year). If you have no current value, then base this calculation on the approximate price you have
determined using the ATO guidelines.
 Closing Written Down Values (at the End of financial year where you undertake this assessment)

Maintenance requirements and schedule for Building

In Part 12 under the Building Regulations 2006, essential safety measures are de ned as the
re, life, safety and health items installed or constructed in a building or place of public
entertainment, to provide for the safety of people.

These items may include:

 Passive re and smoke systems

 Emergency and exit lighting
 Stationary and portable re-equipment
 Automatic re detection & alarm systems
 Emergency warning and intercommunication systems
 Building clearance and re appliances
 Mechanical ventilation & hot, warm & cooling tower water systems.
 Building re integrity
 Means of egress
 Automatic re sprinkler systems
 Fire pump sets

Maintenance requirements for Commercial kitchen

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 We need to ensure commercial kitchens deliver a high standard in food production,
employee welfare and profitability.

 Kitchen exhaust cleaning

 Audit clean
 Compliance inspection
 Filter exchange
 Commercial kitchen equipment cleaning
 Site inspection
 Commercial fitouts and installations
 Emergency breakdowns
 Commercial kitchen cleaning

Schedule daily

Grill, range, and flattop foil linings should be replaced.

 Clean up work surfaces.
 Your grill, stove, flattop, and fryer should be cleaned and disinfected. Don't forget to clean this
equipment's underside and behind it!
 clean the can opener
 Wash the meat cutters.
 Clean up any splashes on the walls.
 Clean flooring
 Wash the soda fountains' beverage dispensers.
 tidy popcorn maker
 Clean the trash-disposal area to stop the spread of bacteria and pests: Clean each can's outside and
interior, and sweep the area around the cans.
 Put the bonnet filters in the dishwasher.

Weekly
 Walk-in sinks and faucets should be cleaned and sanitised.
 Ovens should be thoroughly cleaned, including the sides, top, and racks.
 To clean floor drains, use drain cleaners.

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Monthly

 pristine coffee maker

 Unfilled grease traps

 a pristine ice maker (can be done every several months)

 Clean refrigeration coils to remove dust

 To get rid of grease buildup, wash the walls and ceiling.Maintenance requirements and schedule for
Vehicles

Following are a few tips you can follow to maintain your commercial van.

The need for having a preventative maintenance schedule

You will receive the suggested maintenance schedule from the manufacturer when you purchase a Ford Van. It's
crucial to stick to the programme. It won't be challenging to maintain one or more Ford automobiles if you
carefully study the instruction manual and adhere to the advice.
Create your own maintenance schedule by noting the times that your Ford car will require maintenance or
servicing. You must keep a service log and request that drivers report their mileage. Nothing will be overlooked
in this manner. So, a preventative maintenance schedule needs to be created in accordance with the services
the manufacturer suggests.

Adjust your maintenance schedule as per the driving condition

Those truck drivers who are carrying a lot of weight in the truck or are frequently towing the
vehicles, driving through the dust may require more of maintenance work. Frequently starting
the vehicle and stopping it may take a toll over the vehicle. All such things must be kept in the
mind.

Drivers must be made to report problems

When you give training on how to drive your commercial vehicle, it is important to ask them
to report strange sounds from the vehicle, irregular lights immediately when encountered.
The ones who are driving the Ford can help you to save a lot of repair costs.

Using technology to your benefit

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 If the fleet is extremely large, it will be tough to manage it. Ford vans and commercial vehicles
are such that they may conveniently integrate with popular fleet management tools and
programs. So, no important maintenance milestone can slip through the cracks in this
manner.

Prepare a custom maintenance schedule

As already stated, the maintenance of Ford vehicle depends on the driving condition. Every
commercial vehicle is different and so you must prepare custom maintenance schedule. You
can use the digital programs to prepare such a maintenance schedule.

Monitor each and every aspect of the vehicle for better fleet management

It is important to use digital programs to monitor mileage, to create the maintenance

schedule, to store the maintenance record and to monitor the costs. The automated software
can help in reducing the man-hours and increasing the fleet management accuracy.

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Part C – Resource management strategy

Task:

1. Develop a maintenance regime for each asset based on the maintenance requirements you have
determined in Part B.

2. The maintenance regime needs to include the following details and outline how each aspect is affected
and as a result addressed:

1) Reporting and monitoring mechanisms to ensure assets are functioning effectively and issues are
reported by using correct and suitable procedures including provisions for specialist advice for complex
issues.

Description of Service Frequency of Service

Empty waste baskets Daily
Dust Furniture Daily
Clean Washrooms Daily
Restore paper and soap dispensers 2 times a week
Floor sweeping Daily
Window Cleaning weekly
Checking working condition of Monthly
Lifts
Lights
Air conditioner
Colour and paint Yearly

REGIME FOR Vehicles,

 Daily: Backup your data.

 Weekly: check your machines.
 Monthly: do the service
 Monthly: Scan your all documents and keep it in hard drive.
 Twice a Year: Backup your hard drive as an image. Also check the machines if anything
need to be replace then replace it.

REGIME FOR Commercial Kitchen Equipment.

 Daily : cleaning

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  Daily : watering plants
 Monthly : Weed removal
 Monthly : Grass cutting
 Seasonal clean-up
 Yearly : New plants growing

2) Provisions for collecting feedback from customers and reports from staff.

Reporting and monitoring mechanisms to ensure assets are functioning effectively and
issues are reported by using correct and suitable procedures including provisions for
specialist advice for complex issues.

3) Types of maintenance required including common routine maintenance based on the organisation’s
activities for example adjusting doors, fixing furniture, cleaning air-conditioning filters in guest rooms,
etc.

 Believe that customers possess good ideas.

 Focus on continual improvement.
 Don’t spend vast sums of money doing it.
 Make it easy for customers to provide feedback

4) Location of maintenance, e.g. can it be done off-site or away from heavily-trafficked areas?

 Locks, excluding work that must be carried out by a professional locksmith

 Supply and fitting of light tubes and globes
 Replacement of castors on chairs
 Regular inspections of gutters and down pipes
 Cleaning of silt and acid traps
 Checks of security fences and minor repairs as required
 Soft fall areas in playgrounds/ovals to be maintained at a safe depth
 Repainting of signs/blackboards

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  Minor landscape maintenance
 Replacing tap washers

5) Expected duration of maintenance works

In industrial, commercial, governmental, and residential installations, maintaining, repairing, and replacing
as necessary devices, equipment, machinery, building structures, and supporting utilities
If we have the necessary tools, we can maintain the workplace. So, we can fix it there rather than taking all
the machinery to the factory or work shop.

6) Timing of scheduled maintenance, e.g. slow periods such as during the day for a nightclub, or during the
night in high frequency areas.

You have to make sure that the right people are in the right places at the right times to do the
work of the organization. But it will take 3 to 5 days to do the whole maintenance of work
place like, check it everything.

7) Likely disruption to operations – what are the disruptions and what are the expected impacts?

Making a strategy for who will clean them, when they will be cleaned, and how they will be
cleaned is crucial when thinking about all the places and pieces of equipment in a
commercial kitchen that need to be cleaned.
Plan your kitchen's weekly cleaning schedule with this template. You can either retain it in
your food safety plan documents or print it off and hang it on the wall.
Have finished schedules on hand for health inspectors as proof. Don't forget to include all the
difficult-to-reach spaces as well, like those behind refrigerators and other equipment!

8) WHS issues

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 When considering all the areas and pieces of equipment that need to be cleaned in a
commercial kitchen, it is essential to develop a plan for who will clean them, when they will
be cleaned, and how they will be cleaned.
Use this form to organise weekly cleanings of your kitchen. You may either print it out and
hang it on the wall or include it in your food safety plan paperwork.
Have completed schedules on hand as evidence for health inspectors. Include all of the hard-
to-reach areas as well, such as those behind refrigerators and other

9) Legal and regulatory requirements which apply for the physical assets during the course of the financial
year (for example for vehicles carrying passengers, electrical equipment or as relevant to the specifc
assets)

 The number and location of workers affected by the issue;

 Any relevant accepted industry practice, if that practice is consistent with the
WHS Act and the WHS Regulations;
 The requirements for the management of risks (WHS Act s17);
 What (if any) temporary measures are required;
 What (if any) further information is required;
 A method and timeline for resolution of the issue;
 Whether any other persons may reasonably be required to assist the early
resolution of the issue.

10) Summary of cost impacts for human resources (for examples where maintenance would, e.g. require
penalty rates for maintenance staff) or the costs where contractors are engaged for specific
maintenance requirements

Inspection and maintenance

Depending on the nature and use of the building, the state or territory where the facility is
located, and the sort of building service in question, building owners may be required to
properly maintain building services and produce certification for inspections. In principle, all
structures must be constructed in accordance with the applicable building codes, and it is the
owner's responsibility to maintain the structure. Whether a facility is utilised for residential or
non-residential commercial purposes, landlords are required to keep rented or leased
premises in excellent shape.

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Lifts

The Building Code of Australia (BCA), Australian and New Zealand Standards, state
environmental planning laws, work health and safety laws, disability discrimination laws, and
national construction codes all contain applicable requirements regarding the minimum and
mandatory compliance standards for lifts.

Air conditioning

In general, landlords have a duty to ensure that appliances and facilities such as air-
conditioners (and sinks, baths, etc) are in proper working order.

Automated fire detection and suppression systems

 The BCA requires building owners to install fire safety systems in all buildings,
including existing buildings. These include the installation of smoke alarms. In New
South Wales, building certifiers will generally require a smoke detector compliance
certificate (provided by the electrician who installed the detectors) before issuing
an occupation certificate.
 In certain circumstances, sprinklers or other fire suppression systems are required in
shared accommodation buildings. In NSW, under environmental planning and
assessment regulations, automatic fire sprinklers must be installed in residential aged
care facilities.
 Standards applicable to buildings vary depending on their classification under the BCA.
 Fire-fighting equipment and fire suppression systems must be provided and
maintained in accordance with any occupancy permit or determination issued by a
building surveyor. A building notice or building order issued by a municipal building
surveyor may also require maintenance to be undertaken.
 In some states, the chief fire officer of the fire brigade may also audit buildings to
ensure certain fire safety requirements are met..
Building RCD testing

In most states and territories, under work health and safety legislation, a person with
management of a workplace must make sure that RCDs used at work are tested regularly by
a competent person to ensure they are working effectively.
A record of testing (other than push button testing) must be kept until the device is next
tested or disposed of.

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Whole building' emergency evacuation testing

A person running a company or endeavour at a workplace is required under work

health and safety legislation in the majority of states and territories to make sure an
emergency plan is established, that it includes evacuation procedures, and that it
includes testing those processes. Records of the testing should be kept in order to
prove compliance with this requirement.

11) Costs of scheduled maintenance in terms of parts, required equipment to perform the maintenance and
consumables

Due to the nature of the asset/equipment and the requirement to minimise downtime, maintenance contracts
are typically the most cost-effective way to service or maintain highly technical, scientific, or sophisticated
assets/equipment. Typically, the original equipment manufacturer (OEM), its approved service organisation, or
other parties interested in investing in infrastructure are best suited to maintain or service complex and
expensive asset/equipment. It is crucial for both the owners and the service providers that maintenance
contract costs are accurately estimated. To prevent losses, service providers need to be aware of the expected
cost. Owners and users must be aware of it in order to determine the contract price and avoid overpaying
relative to the cost of performing that task internally.

12) Provisions for monitoring of financial performance of the assets over the budget period.

a. Physical asset life cycle costs can be considerable and are often not transparent to
budget managers. Hidden operational costs relating to physical assets cause significant
problems for budget forecasting and managing cash flow.
b. When new capital assets are purchased it is critical that asset life cycle costs are
identified, so they can be challenged, compared to alternative purchases and included
in future budget forecasts.
c. To meet the 21st century challenges of reducing and controlling operating costs, it is
essential that all businesses have embedded processes to control and monitor their
physical asset life cycle costs.
d. Once transparent life cycle costs are in place savings can be made year on year.
Future changes can then be made that are business resilient, save money and aligned
to long-term business aims.

13) Occurrences based on the details outlined in the questions above which would inform to review or audit
the performance or viability of the assets.

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 It is very important to monitor a wide range of “performance indicators” in your business, in
order to ensure that appropriate and timely decisions and plans can be made. Given that
sales, profit margins and cash flow are the lifeblood of any business, owners should place
particular emphasis on receiving regular reports on these areas of the business. Knowing the
financial position becomes even more important as the business grows, especially if your plan
is to grow the business substantially. Lack of a precise and timely knowledge of the current
financial position can lead to business failure and have other consequences for the
directors/owners.

FINANCIAL STATEMENTS

the minimum financial information for any business should be periodic financial statements
consisting of at least a Balance Sheet and Profit and Loss Statement. Businesses that provide
credit
to customers also need to control their debtors through monthly aged debtor’s trial
balances. Those who have a significant investment in stock should control that through
perpetual inventory records. Regular debtor and inventory reports will help prevent too
much capital being tied up in these areas and allows for prompt follow up action. For
example changing inventory ordering patterns and allowing immediate follow up on debtors
to prevent bad debts. One disadvantage of financial statements is that they show the results
of the business after the event and as such they are a lag indicator. If prepared solely on an
annual basis (and often this happens well after the end of the

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