Create a 2 page essay paper that discusses : WIDGET MANUFACTURING.
In particular, the paper shall discuss the recommended cash cycle of the corporation and the changes that should be adopted in the company’s inventory management system and the estimated benefits. In addition, the paper will also discuss the enterprise’s collections and disbursement systems and what Arnold, as the president of the company should do to manage the company effectively.
Notably, the management of Widget Manufacturing Company had empowered its employees to individually be in-charge of the billings and collection of the funds (Sagner, 2010). The company’s cash cycle promoted fraud since there was no one to keep track of the cash payments and the working capital. According to Sagner (2010), usually, the company’s manager only reviewed the payments on the first day of the month. However, this review was only aimed at whether the cash balances were within the plant’s targets. The company needs to adopt fraud detection and reduction mechanisms to ensure that all the billings and collections are recorded and accounted for. In addition, the manager should adopt real-time categorization and resolution of all cash payments. Instead of reviewing the payments at the beginning of the month, the manager should either accept or reject the cash payments immediately to avoid fraud within the company (Sagner, 2010). The organization should also ensure that all the cash payments are not handled by one individual. This can be avoided through lock-boxing, thereby reducing fraudulent payments.
According to Arnold, the company had never had any inventory sales since its inception (Sagner, 2010). However, the development of the company’s inventory system significantly reduced the cash flow of the company. Accordingly, there are some changes that could be adopted within the company’s inventory management system in order to realize the benefits. The benefits of the inventory management system include tracking the inventory, sales, orders
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