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As Sy's business continues to expand, it is crucial to recognize and address the various risks that may arise in order to ensure smooth and efficient operations. By identifying these risks and implementing appropriate recommendations, Sy can mitigate potential challenges and safeguard the success of his business.
One significant risk that Sy faces is the reliance on traditional mail for sending important documents. There is a high probability that documents could be lost in transit, leading to delays in transactions and potential inaccuracies in recording.
To mitigate this risk, Sy should consider implementing an information technology system that allows for secure and timely document transmission, reducing the likelihood of errors and lost paperwork.
Another area of concern is Sy's current return policy, which lacks a specific timeframe for customers to return fish.
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This open-ended policy could be exploited by customers seeking refunds months after their purchase, impacting sales revenue. To address this risk, Sy should revise his return policy to establish a clear deadline, such as 15 days, for customers to return fish. This will help prevent abuse of the policy and ensure that only fresh fish are returned within a reasonable timeframe.
Furthermore, the decentralized nature of bookkeeping and job responsibilities within Sy's business poses a risk due to the lack of accountability and oversight. With multiple employees from different locations handling various aspects of bookkeeping, there is a potential for errors and inconsistencies in financial records. To mitigate this risk, Sy should consider centralizing the bookkeeping process and assigning specific roles and responsibilities to individual employees.
By implementing a system of checks and balances, Sy can ensure the accuracy and integrity of financial data.
In addition, the current accounts payable procedure, managed by Natalie, presents a risk due to the lump sum payments made to fishers and the timing of recording transactions. By recording all miscellaneous payable documents on the date received and issuing payments based on individual invoices, Natalie can improve the accuracy and transparency of the accounts payable process. This will help prevent errors and discrepancies in recording payments and ensure proper documentation of financial transactions.
Another area of concern for Sy is the lack of visibility into customer accounts receivable, which poses a risk in managing bad debt. Without a clear understanding of outstanding payments and overdue accounts, Sy may struggle to recover funds owed to the business. To address this risk, Sy should establish an accounts receivable ledger to track customer payments and identify delinquent accounts. By monitoring accounts receivable closely, Sy can proactively address overdue payments and minimize the impact of bad debt on the business.
Moreover, the lack of proper documentation and transparency regarding AFS securities in Sy's financial statements poses a risk to external investors and stakeholders. Without clear explanations or disclosures on the nature of these investments, investors may be hesitant to engage with Sy's business. To mitigate this risk, Sy should enhance the disclosures related to AFS securities in his financial statements, providing detailed information on the nature of the investments and the intended use of funds. By enhancing transparency and clarity in financial reporting, Sy can build trust with investors and attract potential stakeholders.
In conclusion, by identifying and addressing these key risks, Sy can strengthen the foundation of his business and ensure sustainable growth and success. Through proactive risk management and strategic decision-making, Sy can navigate challenges effectively and position his business for long-term viability and profitability.
Mitigating Risks for Sustainable Business Growth. (2016, May 28). Retrieved from https://studymoose.com/sys-fish-company-risk-analysis-essay
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