Suppose your meetings with the Board, general manager and owner have raised many concerns. It seems over the past few years the general manager has been forced to use his personal credit card to fund wage payments because there were insufficient cash funds within the organizations bank accounts. This confused you, as the business appears to be very profitable and over recent months has been spending a large amount of money on new kitchen equipment and refurbishing of the public areas. However, no attention has been paid to computerizing processes. Another concern was the general manager’s willingness to pay small expenses directly from money in the cash drawers. When discussed with the general manager, his attitude was that “in the long run it all comes from the same bucket”. There appeared to be no formal procedure for the handling and control of cash nor was there any formal audit process in place. The Board has contracted to purchase a local Hotel which appears to be profitable and calculations suggest the average monthly profit after expansion is attractive. However, you have discovered the existing staff members of the target hotel have been with the present owner for many years and are very loyal to him. After some deliberation and further discussion with the general manager, it has been requested that you write an authoritative report to the Chairman of the Board identifying the importance of the following issues and why they should be implemented within the organization. Requirements:

1. Inform the Board on Cash Handling and Control measures.

2. Inform the Board on any benefits flowing from implanting computerized systems,

3. Identify and comment on key Risks,

4. You will need to consider Sustainability and Ethics in your report.

It should be noted that there are members on the Board of Management, including the general manager, who believe the current processes are acceptable, and any additional requirements will only add costs with little or no benefit. It is part of this report’s objective to convince these Board of Management members of the importance of these issues. The report will need to do more than just explain what the processes and procedures are, but why they are needed, as the Board of Management’s inclination is to leave the current situation as is and make no changes.

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Introduction In the contemporary business environment that is characterized with increased competition the importance of adopting agile financial management strategies by an organization cannot be ove... View the full answer