Financial accounts within an organisation are a tricky business. Accounts receivable and incoming payments can defer owed money, so your chief financial officer must pay careful attention to ongoing account activity in order to make sure that too much is not promised and too little paid in ongoing rent, payroll and account activity. You see, it is this deferment of payment which can create a perception of financial stability. It becomes easy to not keep books appropriately or not to take responsibility for keeping track of net earnings since companies, especially large companies, can have multiple accounts which have pending payments. Workplace drug testing and alcohol testing is helpful in making sure that current actions are noticed and that employees keep a close watch on their personal behavior at all times.
If you have received training in business accounting, then you understand that records must be kept of total net worth, including accounts payable and accounts receivable, both of which are pending payments. If you have ever started your own business and come across the problem of mismanaged money, you are sure to realise how important it is to maintain company tools, such as drug and alcohol testing. Your responsibilities include evaluating and (more importantly) understanding cash flow. Cash flow is the heart of your business operations. In a study by Michael C. Jensen, he talks about how business growth is an incentive to mismanage cash flow, and that managers have a very real interest in increasing their own individual corporate power by using cash flow to fund further growth, rather than paying ongoing service and production bills, not to mention their payroll costs. Since they are in the position of partially controlling cash flow, they are tempted to aid their own cause. Drug testing can help in reminding everyone that actions have consequences and in facilitating a community attitude of cooperation and teamwork. Drug and alcohol testing helps to move this in the right direction. It allows you to set limits and boundaries on unacceptable behavior. Drug and alcohol testing equipment is readily available for companies which are implementing new employee testing policies. Contact CMM Technology today to ask us about our drug tests, our breathalyser devices, and our staff training which is available for your business: (+61) 1300 79 70 30.
“Agency Costs of Free Cash Flow, Corporate Finance and Takeovers.” JSTOR. N.p., n.d. Web. 9 Nov. 2011. http://www.jstor.org/pss/1818789.