This week's topics of research delves into the external factors of insurance and finance. These factors have a profound effect on how the business operates, charges for services and provides salaries.
The insurance side of the business covers two main areas. The first is to financially cover the business in case of equipment damage, accidents or even theft. This can give the business a peace of mind knowing that should the unsavoury situation occur, it can safely recover financially as it is provided for in case of the emergency.
The other side is that dealing with insurance companies also allow partnerships to be established. By establishing a partnership with the insurance company, the workshop is able to have an extra stream of potential customers. Personal insurance customers who insure their vehicles with the insurance company can be referred to the workshop as a viable and trustworthy vehicle repair site should the vehicle of the customer require repairs.
Lastly, because of the partnership and the benefits that come with it, the workshop's services, charges, and costs can then be regulated on a realistic basis. This ensures laws are abided by, no corners are cut, and ethical practices are upheld.
The last big external factor to consider is the finance side of matters. For the life cycle of the workshop, it has to consistently deal with financial situations and organisations. The initial organisation that it deals with is the bank where it looks to obtain a business loan in order to have startup capital to start the business.
Once the business is established and the loan is being repaid, the Inland Revenue Department (IRD) is the next organisation that the business has to deal with. Taxes must be paid to keep balance of the economy of the nation and is paid in a number of ways. The first way is the goods and services tax (GST) where services rendered or parts sold must be sold with GST accounted for.
The other way is through employee taxes. The owners of the workshop hold this responsibility and have to calculate and deduct the pay as you earn (PAYE) employee taxes to the government. On a side note, there is also the added factor of retirement schemes such as KiwiSaver that employers and the government must contribute financially to staff.
To make sure that the employer is on top of things, an accountant has been appointed in the case study to ensure that all the financial obligations are met. This is to minimise and negate unnecessary fines and penalties and for the workshop to attain maximum profit and benefit from business operation in accordance with the law.
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