Accounting and Inventory Control

Neo Juventud

03 JULY 2009

Team Esperanza

Client: Neo Juventud

 

Executive Summary

 

Neo Juventud is a small organization located in Palmar that strives to promote social projects and small business ventures, including a bakery, gymnasium, internet cafe, mini-theatre, sale of artisan crafts (jewelry), and sale of quail eggs. Several of the business ventures are in their developing stages and lack fundamental systems of tracking and counting. For this reason Team Esperanza prepared a workshop for the organization in basic accounting and inventory control. We explained basic accounting principles and techniques and how they can aid in managing their own business ventures. Next, we introduced a simple balance sheet and statement of cash flows and demonstrated its effectiveness with a bakery example. We also analyzed one of the businesses’ books and logs to see how Neo Juventud can apply information from the workshop to improve their system of accounting. Subsequently, we discussed why efficient inventory control is necessary for a successful small enterprise and the delicate balance between excess inventory and insufficient inventory and the negative consequences associated with each one. We also explained the importance of maintaining an accurate record of sales and inventory items and demonstrated these principles with a group activity involving real-life examples.

 

Goals/Objectives

 

Workshop:

  1. Present information (definitions and techniques) on inventory control and basic accounting and its importance to leading a successful small business
  2. Practice completing their own balance sheet and statement of cash flows
  3. Practice examples of inventory control focusing on the various business ventures, including the bakery, gymnasium, etc

 

Short-term:

  1. Apply basic accounting practices to gymnasium and artesanía.
  2. Construct statements of cash flows to derive conclusions about their ongoing businesses and identify underlying problems and patterns of success
  3. Analyze any available accounting books/logs or inventory systems for each of the businesses and what improvements can be made

 

Long-term:

  1. Independent accounting and documentation
  2. Increased organization of inventory within all of the businesses

Needs Analysis

 

Neo Gymnasium:

  1. List of all inventory items (i.e. machines) and system of control
  2. Membership accounts and tracking of customers

 

Neo Artesanía:

  1. List of all inventory items and system of control

 

Neo Panadería

  1. List of all raw materials and system of control

 

Current Progress

 

Neo Gymnasium:

  1. Working system of accounting (it’s really simple)

 

Neo Artesanía:

  1. Miguel has his own system of bookkeeping that seems to work well

 

Neo Panadería:

  1. One of the members of Neo Juventud is in charge of accounting and she does an excellent and detailed job

 

Underlying Problems

 

  1. Lack of several inventory control systems

 

Work Plan

 

Neo Gymnasium:

  1. Meet with Marcelo and review list of inventory items and accounting books
  2. Construct an inventory system with him

 

Neo Artesanía:

  1. Meet with Miguel and review list of inventory items
  2. Construct an inventory system with him

 

Neo Panadería:

  1. Meet with manager and review list of raw materials (i.e. foods sold)
  2. Construct an inventory system with person

 

Final Thoughts: We are unsure why Team Oportunidad recommended that we provide a workshop on accounting as their bookkeeping skills surpass what was presented in the workshop. All 3 businesses, the bakery, gymnasium, and artisan shop, have someone in charge of accounting and they were all very skilled and detailed in their work. The workshop served to give others an opportunity to practice these crucial skills and to demonstrate what information can be extracted from the numbers. On the other side of the world, Neo Juventud completely lacks any form of functioning inventory control systems. We have asked that all 3 businesses make a record of all their inventory items and we recommend that Team Impacto meet with each of the 3 managers to cooperatively construct basic inventory control systems.

 

Also, if you need our presentations we can send them to you.