Smith and Token
Mr. Scott Devin, Owner and General Manager
Capital Food Supplies
23 Feel Good Drive
Cape Canaveral, Florida 32920
Dear Mr. Devin:
After analyzing Capital Food Supplies’s expense account at your Cape Canaveral location for the 2014 year, ended on December, 31, 2014, a weakness appeared that could be harming the efficiency and financial well-being of your business:
- Lack of strong internal control
Please refer to the following paragraphs for more detail.
Currently, the account receivables and payables for Capital Food Supplies’s expense account at your Cape Canaveral location only has a total of ten items listed for the month of January for the entire fiscal year. However, the liabilities and assets account say otherwise. There should be at least twenty items accounted for each month; equaling about 240 entries for the fiscal year. Since there is not a proper system that documents Capital Food Supplies’s accounts receivables and payables account, it is difficult for this location to profit and manage the business effectively. A more efficient system to track the expenses would improve this location’s profits. We recommend that the Capital Food Supplies’s management at the Cape Canaveral location should sit down and develop a system to document when accounts receivable, accounts payable, payable records, bill payments, and bank reconciliations are done. Two current managers, yourself and the current employee, will be responsible for properly documenting the coming and goings of money. Then, at the end of each month, the managing team will sit down for a monthly progress meeting to make sure that each account is reflecting the financial activity that took place that month. By implementing more organized accounting system, this location could not only earn more profits, but run more efficiently as well.
Please contact us if you have any more questions, or concerns. We would be more than happy to discuss with you the easiest way to start implementing the above plan.
Smith and Token
Certified Public Accountants