Introduction
This case study explores the challenges faced by a client operating restaurants and mobile food service activities in Ireland and outlines the strategies implemented by Aurnex Ltd to enhance their financial operations. The primary issues identified included inadequate invoice documentation, lack of understanding of bank feeds, duplicate invoice creation, missing VAT rates, and currency exchange rate inconsistencies.
Challenges
- Bank Transactions: The client was not providing bank data in the correct order, leading to manual entry of transactions and potential errors.
- Invoices: For large transactions, proper invoices were often missing, making it difficult to reconcile bank payments with corresponding invoices.
- Bank Feeds: The client lacked knowledge of bank feeds, a feature that can automate the process of importing bank transactions into accounting software.
- Duplication: Invoices were sometimes created twice, leading to inconsistencies and errors in the financial records.
- VAT Rate: The VAT rate was not always mentioned on invoices, making it challenging to calculate the correct tax amount.
- Currency Exchange Rate: When dealing with transactions involving foreign currencies, the client did not always apply the correct exchange rate.
Solutions
To address these challenges, the following strategies were implemented by Aurnex:
- Bank Transaction Adjustments: Bank transactions were adjusted to ensure they were entered in the correct order and manually added if necessary.
- Invoice Reconciliation: Clients were requested to provide proper invoices for large transactions, which were then reconciled with bank payments and receipts.
- Bank Feed Implementation: The client was educated on the benefits of bank feeds and guided on how to connect their bank accounts to accounting software.
- Invoice Duplication Prevention: A process was established to check for duplicate invoices and delete any unnecessary entries.
- VAT Rate Verification: The business of the client was researched to determine the appropriate VAT rate, and invoices were categorized and taxed accordingly.
- Currency Exchange Rate Accuracy: The purchase and sale dates for foreign transactions were identified, and the exchange rate for that specific day was obtained from Google.
Results
By implementing these solutions, the client’s financial operations were significantly streamlined. The accuracy of bank transactions improved, bank reconciliation became more efficient, and the risk of errors due to duplicate invoices was minimized. Additionally, the correct VAT rates were applied, ensuring compliance with tax regulations. The use of accurate exchange rates for foreign transactions also enhanced the reliability of financial reporting.
Conclusion
This case study demonstrates the importance of effective financial management for businesses in the restaurant and mobile food service industry. By addressing the challenges outlined in this case, the client was able to improve the accuracy and efficiency of their financial processes, leading to better decision-making and overall business performance.
