Icas project case study - advice required

geek84

Hi Folks

Is anybody else doing the Cookridge Carpets case study as part of their project?

If so, I am stuck on section 10 - Costs/Benefits Analysis.

Would somebody be kind enough to give me any hints of how to go about completing this section?

Thanks in advance.

P.S You can PM with your suggestions if that is easier for you.

Chelle

I undertook Inkwell Ltd, which is basically the same scenario.

It depends on what your main topic for the project is.

I done mine mainly on changes within the accounting system itself, so then carried out a cost benefit analysis with a new accounts package, stated what the accounts package was called, how much it would cost, what benefits it would have.

Hope that helps?

All the best

uknitty

The cost benefit analysis should be related to the recommendations you have made in your improvement section.

It isn't really related to the cast study you are using so much as the observations you have already made in the main part of you project.

geek84

Hi Folks

Many thanks for you replies.

How would I find out the monetary value of a recommendation?

Could someone advice on that please?

uknitty

You use the internet to look up the price of whatever you are recommending implementing.

Don't forget to take in to account the cost of lost working hours, or working hours that will be saved once the new system is implemented. The case study will give you the salaries/wages of the staff.

sdv

geek84 wrote: »

Hi Folks

Is anybody else doing the Cookridge Carpets case study as part of their project?

If so, I am stuck on section 10 - Costs/Benefits Analysis.

Would somebody be kind enough to give me any hints of how to go about completing this section?

Thanks in advance.

P.S You can PM with your suggestions if that is easier for you.

Cost benefit analysis is quite straight forward.

I presume that you will have done a SWOT analysis and put that into Appendix.

On your SWOT in the weakness section, you will have listed a number of weaknesses found for accounting department that you are analyzing.

Really you could do a cost benefit on every weakness that you have identified. The benefit does not have to be obvious financial benefit but if you have planned writing on the weaknesses than it would be wise to plan on a weakness that you could easily do a cost benefit analysis on.

for example

in Payroll, the company may be paying it's employee's in cash and you could have identified this practice as a weakness because

1 handling cash from bank to company premises - danger of being robbed
2 Two employees required to get cash from bank to company
3 two employees required to prepare cash wages packet
4 Temptation for a financially troubled employee to steal cash
5 Possibility of human error in counting cash for pay packet
6 securing and safeguarding cash packets not yet collected by employees
7 Cash pay packet could be issued to unauthorized relative of company's employee - company may have to pay wages twice- additional cost to company

Your recommendations to solve the above weakness may be to pay all employees by BACS.

to do the cost benefit analysis on above weakness you would have to first cost the current practice to pay employees by cash

1 cost to 2 employees to go and collect cash from bank – number of hours to collect cash
2 cost of insurance premium to insure employee's against being robbed and loss of working hours and damages payable to employee's health and well being (research on internet or estimate)
3 cost of 2 employee's preparing pay packet (number of hours)
4 reflecting on past experience of how much cash has been lost due to human error ( you may have to estimate here)
5 cost of handling cash by bank - generally 1% cost cash withdrawn but re-search on internet

Then cost your recommendation
How much would it cost to pay all employees by BACS.

The difference between the cost of current practice and cost of your recommendation if the financial savings

Your recommendations will also have the following benefits
1 employees would get their wages straight into their bank account
2 reduce in human error
Etc.