Effective Operations and Controls for the Small Privately Held Business

by Reider, Rob

• ISBN13: 9780470222768
• ISBN10: 047022276X
• Edition: 1st
• Format: Hardcover
• Copyright: 2008-01-02
• Publisher: Wiley

Summary

In a Sarbanes-Oxley world that combats some of the practices that created financial abuses in a number of major corporations the small business, both public and private, due to its nature may be even more susceptible to such financial abuses. However, without effective financial and operating controls, many of these abuses go undetected. This book outlines the development of an effective control system for the small business that is cost effective and enhances operations and resultant profitability. With all the fuss about Sarbanes-Oxley and the large publicly held entity, it is the non-regulated small business and its need for controls that has been neglected. The tentative contents is: (1) Understanding the Small Business Environment; (2) Introduction to the Internal Control Environment; (3) Operational Control Considerations; (4) Sales Function Controls; (5) Direct Cost Controls; (6) Accounting Function Controls; (7) Reporting Control Considerations; Afterword; Appendices: (A) Computer Processing: IT Control Considerations, (B) Specialized Industry: Not-for-Profit Control Considerations, and (c) Controls by Type of Business.

Author Biography

Rob Reider, CPA, MBA, PhD, is the President of Reider Associates, a management and organizational consulting firm. His area of expertise encompasses planning, managerial, and administrative systems and methods; data processing; financial and accounting procedures and controls; organizational behavior and theory; management advisory services; management information and control techniques; management training; and staff development. He is also a frequent commentator on the monthly educational videotape programs produced by primedia Workplace Learning, including The CPA Report, Governmental A&A Specialist, and the Accounting and Financial Managers Report.

Table of Contents

Preface	p. XI
Acknowledgment	p. XVII
Understanding the Small Business Environment	p. 1
Understanding the Small Business	p. 1
Small Business Management	p. 4
Small Business Computerization	p. 5
Operational Management Function	p. 7
The Family Business	p. 8
Basic Operating Formula	p. 16
Why the Small Business Is in Existence	p. 16
Businesses the Small Business Is Not In	p. 17
Helpful Systems	p. 21
Management Responsibility	p. 21
Operating Areas to Be Addressed	p. 22
Economy, Efficiency, and Effectiveness	p. 29
The Initial Survey	p. 31
Strategic Concepts	p. 35
Strategy Development	p. 36
Strategies for Competitive Advantage	p. 37
Other Strategies to Exploit	p. 40
Business Models	p. 42
Front-End Strategy Analysis	p. 43
Overview of the Strategy Development Process	p. 44
Some Basic Business Principles	p. 49
Mental Models and Belief Systems	p. 50
Situational Analysis: Planning Questions	p. 52
Planning and Budgeting: Identifying the Right Direction and Staying on the Path	p. 57
Relationship between the Planning and Budgeting Process	p. 58
Planning Process	p. 62
Budgeting Defined	p. 65
Developing and Monitoring the Budget	p. 67
Nonmanufacturing Budgets	p. 68
Conclusion	p. 69
Improving Customer Service	p. 73
New-Customer Quest	p. 75
Servicing Present Customers	p. 76
Striving for Outstanding Customer Service	p. 78
Golden Rule of Customer Service	p. 88
Looking at Customer Service from a Fresh Perspective	p. 98
Tips for Terrific Touchpoints	p. 100
Tips for Avoiding Traps that Trip You Up	p. 102
Tips for Watching Out for Traps	p. 107
Making that Great Customer Service Last: Keep the Romance in the Relationship	p. 107
Conclusion	p. 108
Cash Conversion	p. 111
Cash Conversion Basics	p. 112
Cash Conversion Objectives	p. 119
Profitability versus Liquidity	p. 120
Sales Function	p. 129
Purpose of the Sales Function	p. 130
Sales Function in Business for Itself	p. 132
Product Analysis	p. 133
Sales and Product Controls	p. 135
Sales Forecasts	p. 138
Pricing Strategies	p. 139
Methods of Sales	p. 144
Methods of Compensation	p. 145
Sales Information and Reporting Systems	p. 147
Performing the Sales Function Analysis	p. 148
Sales Function Desirable Practices	p. 149
Conclusion	p. 151
Cost Considerations	p. 153
Cost Classifications	p. 154
Manufacturing versus Nonmanufacturing Costs	p. 154
Activity-Based Costing Overview	p. 157
Cost Elements	p. 170
Cost Reduction Analysis: Traditional versus ABC	p. 179
Customer Cost Concepts	p. 183
Analysis of Cost Behavior	p. 189
Conclusion	p. 196
Accounting Operations: Functional Considerations	p. 199
Accouting Function	p. 200
Function Analysis	p. 201
Choosing What to Analyze	p. 202
Financial Reporting	p. 208
Operational Analysis Survey Form	p. 208
Analysis of Functional Costs	p. 212
Developing Recommendations	p. 216
Conclusion	p. 224
Operational Reporting Considerations	p. 227
Small Business's Numbers	p. 228
Financial and Operating Ratio Analysis	p. 238
Key Operating Statistics	p. 249
Conclusion	p. 259
Internal Controls for the Small Business	p. 263
What Is Business Risk?	p. 264
Internal Controls as Best Practices	p. 267
Small Business Stakeholders	p. 268
Internal Control Concepts	p. 269
Internal Control Objectives	p. 273
Consideration of Fraud	p. 274
Internal Control Considerations	p. 278
How to Segregate Duties (at a Work or Activity-Unit Level)	p. 285
Performance Measures	p. 286
Internal Control Review: The 12-Step Program	p. 289
Internal Controls for Operations	p. 292
Effective Controls by Type of Business	p. 298
Conclusion	p. 310
Information Technology Control Considerations	p. 313
Overview of Computer Operations	p. 315
Control Objectives for IT	p. 316
IT Controls	p. 319
Common Small Business IT Control Weaknesses	p. 335
IT Control Examples	p. 337
Developing a Web Site	p. 345
Organization Structure and the Role of Management	p. 355
Organizing the Small Business	p. 356
Why Organize?	p. 359
Building the Small Business Organization Structure	p. 365
Comparisons between Individuals	p. 369
What Is Management?	p. 370
Management Functions	p. 372
Management Skills	p. 374
Why Managers Fail	p. 375
Tools for Self-Appraisal	p. 376
Conclusion	p. 376
Afterword	p. 383
Index	p. 389
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