Explain The Interaction Of Functional Areas And How They Relate To Each Other In Two Selected Businesses?


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There are functional areas in almost any business and the larger the business, the more functional areas there are.

Every business no matter the size has an accounting function of some kind. In a small business it may only consist of a person who keeps receipts in order and later delivers them to a CPA or bookkeeper who will do the actual accounting work that is necessary for state and federal tax purposes. A large corporation may have an entire team of CPA's that monitor every aspect of the business and prepare all federal and state tax returns in house.

Accounting is directly related in every business to the sales and distribution function. When a sale is made the cost of the good sold must be recorded against the actual sales price to determine how much profit is made on each sale. Costs for overhead and other aspects must be included to have an accurate record of the sale and have an accurate account of how the business stands financially at any given point in time.

Almost every business in this day and age has an information technology function. In a small business it may be simply a web site that was designed off-site and an email account where one person answers questions about sales and other information. In a large corporation, the information technology covers almost every business function in the company. Software packages such as Customer Resource Management (CRM) and Enterprise Resource Planning (ERP) cover every aspect of the business from the production floor to shipping and receiving and include special reports functions that allow management to have a closer look at all aspects of the operation.

Expect this trend to continue as technology takes a larger role in the everyday operation of businesses of all shapes and sizes. With the advent of cloud computing, CRM and ERP services are now available for small business.

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