...how to go about developing and monitoring a budget. It will help you with an overall organisational budget as well as with a budget for a specific project. It includes tools for estimating costs as well as tips for ensuring that your budgets meet the needs of your project or organisation. In the examples section we give actual examples of budgets and how they can be monitored. Why have a toolkit on budgeting? Budgeting is the key to financial management. The toolkit will help you plan, develop and use budgets effectively in your organisation. If you have a sound understanding of the principles of budgeting, you will be well on the way to sound financial management. If you use this toolkit in conjunction with other toolkits, as indicated, you will increase the capacity of your organisation to manage its finances effectively. You will also increase its ability to survive through foresight and planning. Who should use this toolkit? This toolkit is aimed specifically at people who have had little or no experience with budgeting. Perhaps you have not been involved in running an organisation, project or department before. Or perhaps you have not been involved in the financial management side of the work before. Now you are faced with the task of developing a budget, or budgets, and you are not quite sure where to start. If you are in a situation like this, then this toolkit will be useful for you. When will this toolkit be useful? After you have done the strategic planning for your...
Words: 7666 - Pages: 31
...about developing and monitoring a budget. It will help you with an overall organisational budget as well as with a budget for a specific project. It includes tools for estimating costs as well as tips for ensuring that your budgets meet the needs of your project or organisation. In the examples section we give actual examples of budgets and how they can be monitored. Why have a toolkit on budgeting? Budgeting is the key to financial management. The toolkit will help you plan, develop and use budgets effectively in your organisation. If you have a sound understanding of the principles of budgeting, you will be well on the way to sound financial management. If you use this toolkit in conjunction with other toolkits, as indicated, you will increase the capacity of your organisation to manage its finances effectively. You will also increase its ability to survive through foresight and planning. Who should use this toolkit? This toolkit is aimed specifically at people who have had little or no experience with budgeting. Perhaps you have not been involved in running an organisation, project or department before. Or perhaps you have not been involved in the financial management side of the work before. Now you are faced with the task of developing a budget, or budgets, and you are not quite sure where to start. If you are in a situation like this, then this toolkit will be useful for you. When will this toolkit be useful? After you have done the strategic planning...
Words: 7666 - Pages: 31
...Unit six: Principles of budgets in a business environment Assessment You should use this file to complete your Assessment. • The first thing you need to do is save a copy of this document, either onto your computer or a USB drive • Then work through your Assessment, remembering to save your work regularly • When you’ve finished, print out a copy to keep for reference • Then, go to www.vision2learn.com and send your completed Assessment to your tutor via your My Study area – make sure it is clearly marked with your name, the course title and the Unit and Assessment number. Please note that this Assessment document has 7 pages and is made up of 3 Sections. Name: Section 1: The purpose of budgets This section will help you to evidence Learning Outcome 1: Understand the purpose of budgets in a business environment. |Learning objective |Place in Assessment | |1.1 Explain the purpose of budgets for managing financial resources to meet business |Question 1 Page 1 | |requirements | | 1. Why are budgets used to manage financial resources? [1.1] A budget is a plan translated into money and a tool for spread resources and perform strategic plans. Financial...
Words: 1318 - Pages: 6
...To be frugal is to know how to live on a budget (verb) and to live on a budget we need to know what a budget (noun) is. The word budget is often said to come from the Latin word bulga meaning little pouch or knapsack. But there is so much more to the word. The definition of a budget is an estimate of income and expenditures for a set period of time. According to David Ramsey, an expert of finance, a budget basically is a plan for your money or telling your money what to do. Now the first budget was presented in India on April 7, 1860 by the East India Trading Company to the British Crown by James Wilson. This brought clarity to British Crown on the finances that were going on. Now these are some reasons to have a budget. The first reason is to understand the nature of money and where it is going. Money is a very complex subject to understand. To some money means the sum of cash you have in your pocket or the amount of money in your bank account. Money could also represent credit, the ability to buy a house on mortgage, or the ability to obtain merchandise with a credit card and knowing that one can understand that money can be like a wild animal without direction or instruction. A budget can be compared, figuratively, to a leash on that animal to control it. Without a budget money has the capacity to overrun and control your life. The second reason to have a budget is to specifically find out what a need is and what a want is. Needs are defined as goods or services that are...
Words: 1040 - Pages: 5
...• Budget management analysis is used by mangers as a tool and helps determine that all resources available are being used efficiently. The budgets are determined yearly and are based upon the previous year’s budget and variances. This paper will discuss specific strategies to manage budgets within forecast, compare five to seven expense results with budget expectations, describe possible reasons for variances, give strategies to keep results aligned with expectations, recommend three benchmarking techniques, and identify those that might improve budget accuracy, and justify the choices made. • How are operating budgets developed, for what time frame and who is involved? The operating budget is a plan for the organization’s revenues and expenses that generally covers a period of one year. In healthcare organization the nurse manager of each cost center involves in the preparation and control of the operating budgets. The finance office of the organization provides support throughout the budget process development. The budgets for the costs centers are combined, and the executive management of the organization makes final decisions on a budget to be submitted to the board for approval. The nurse managers need a variety of information to begin the process of preparing operating budgets for their cost centers, such as the information generated by the organization’s environmental review and by its development of general goals, objectives, policies, organization wide assumptions...
Words: 2115 - Pages: 9
...Family Budget Basics It's not always easy to meet our financial obligations each month, and that's where creating a family budget can help. Nearly every day, we have multiple financial demands placed upon us. Whether it is grocery shopping or paying the monthly electric bill, we're faced with family budget decisions all the time. Family Budgeting It's sometimes difficult to deal with financial planning matters such as family budgeting. There is one more bill to pay, or a big decision needs to be made on an expensive family vacation. But no matter how people might try to deny it, this is a hard rule of life: We make decisions all the time that affect our ability to stay out of debt. Additional Resources Household Budget Basics Budget Worksheet Budget Worksheet Part II Family Budget Basics Saving Money Surviving a Recession Staying Out of Debt Financial Planning After a Death Family budgeting is all about choosing between the options available to us, including those that help us to stay out of debt. One of those important options we have includes creating a family budget that meets our individual needs. Unfortunately, for many of us, budgets are a reality check that we try to avoid. For example, our family budget might tell us that we make enough money each month to pay that electric bill, but we need to give up going out to eat twice a week, or eliminate a habit of buying such expensive clothing. These are the types of decisions we are talking...
Words: 5331 - Pages: 22
...ACTIVITES Activity 1 Objective To provide you with an opportunity to identify and interpret the range of financial information and reports required for the organization to monitor business performance. Activity Answer the following questions, giving as much detail/explanation as you can to support your answer: (a.) What reports are used at your company to monitor business performance? At the restaurant where I work at, a few different types of reports are used to monitor the business performance such as: account summaries and balances, balance sheets, bank statements, banking summaries and business activity statements. (b.) What are they used for? Financial reports are used to keep track of the business operation. These reports are produced to reflect the business's earnings and spending within the given fiscal year. (c.) What do they reveal about the condition of the business? The reports reveal the impacts the financial information may have on operational activities in the restaurant. Activity 2 Objective To provide you with an opportunity to interpret financial information and reports applicable to operational or departmental activities. Activity Name five types of information, such as a bank statement or balance sheet that you may have to interpret at work. 1. Profit and loss statements 2. Invoices 3. Bank Statements 4. Balance sheets 5. Business activity statements What kind of information can you gain from each document? Profit and loss statements:...
Words: 2094 - Pages: 9
...national budget indicates, in terms of manpower, money, machines and materials, the country’s total resources to be utilized for various activities during a specified period. It is scrutinized by the country’s legislature; it becomes a piece of legislation when the legislature approves its adoption. The annual budget of an educational institution is approved by the institution’s governing board. The approved budget becomes the legal authority by virtue of which executives, agency heads or administrators can initiate or carry out activities designed to achieve organizational objectives. What is Budgeting? Budgeting is the process of systematically relating expenditure to achieve planned goals and objectives. It follows five phases and has three major functions. The phases of budgeting are as follows: Phase I – identification of programs/projects/activities to be accomplished during the budget period; Phase II – identification of resources in terms of manpower, money, machines and materials; Phase III – costing of resources, which is the most important activity in budgeting since the budget is fundamentally a financial statement; Phase IV – presentation of the budget in accordance with guidelines periodically issued by the proper authority, e.g., the Department of Budget and Management in the case of the Philippines; and Phase V – obtaining the approval of the appropriate authority, this involves piloting of the budget through a series of budget hearings...
Words: 3285 - Pages: 14
...Free business plan workbook This workbook asks you many questions. The more you answer the more you understand of your new business. If some questions do not fit to your kind of business - just delete them. If you miss important questions - then insert them. The workbook is that flexible. You are the one in charge of developing your new business. A business plan A business plan is a description of the firm you are to establish and a plan for how to run and develop it. The plan will gather up the threads from all your other preparations and in this way guarantee that you get around all aspects at business start. A business plan is also a basis for negotiations with the bank and possibly business connections to convince them to give credit or a loan. It can also help you to convince family/ friends/ partners that it is a serious plan to start your own business. Follow the chronology of the workbook and you will bit by bit build your own business plan. The Dynamic Business Plan – the book behind the workbook |This workbook is short and concrete. To benefit fully from the workbook and to make sure you |[pic] | |cover all aspect of your start-up, you should read the book: The Dynamic Business Plan. | | |The book explains all the questions asked in the workbook. | | | ...
Words: 1957 - Pages: 8
...United Consultancy - Discuss the advantages and disadvantages of current budgeting approach used by United Consultancy ( to answer part A(i), you don't have to prepare the flex budget. All you need to do is to comment on the limitations of the fixed budget presented in relation to the variance analysis) Part A (ii) - you need to comment on the limitations of the existing operating statements presented - No calculation required Part b - you might want to start with the briefly explanation on the differences between fixed and flexed budget - discuss the limitations of the fixed budget - discuss why flexed budget is useful - discuss the step by step on how the spreadsheet software can be used to setup the flexed budget - in the step by step, you need to clearly identify the format required and the formula need to be included so that the user to key in the budget, and actual and the system will automatically calculate the flexed budget and the variance. - Remember in flexed budget: only the variable cost need to be recalculated. Part C - You need to explain clearly whether the zero based budgeting is suitable for United Consultancy (for each justification, the example should be provided) - you need to discuss the advantages and disadvantages of zero based budgeting - for each of the advantage and disadvantage, you need to provide example. Remember: Harvard referencing format with both in-text and summary of references must be...
Words: 257 - Pages: 2
...trying to turn a vision into a reality. The first thing of course will be the hiring process. Having a vision, the director will have a certain idea of how he/she expects the organization to be run. So, when the hiring process begins, he/she will want to make sure that they find the most qualified people, and ones who will share the same ideology as they do. The one drawback that I can foresee, are the ones with exceptional qualifications wanting more money. With having a budget, this leaves very little room for salary negotiations. Another issue would be finding the right place to open this organization. Since you have a budget, you must choose the best place possible and the right size as well. Being on a budget could make this task kind of difficult. Finding the right place to work on the budget you have and also accommodate the 1,000 students you hope to have for the first year, and then a projected amount for the next year, and every year thereafter. And doing all of this while trying to stay in budget. Next...
Words: 1896 - Pages: 8
...a Cash Budget Cash is vital and planning the company's cash needs is a key business activity. The cash budget shows the anticipated cash flows, over a one- to two-year period. The cash budget contains the following three sections: * Cash receipts section—includes expected receipts from the company's principal source(s) of revenue, such as cash sales and collections from customers on credit sales. This section also shows anticipated receipts of interest and dividends, and proceeds from planned sales of investments, plant assets, and the company's capital stock. * Cash disbursements section—shows expected payments for direct materials, direct labor, manufacturing overhead, and selling and administrative expenses. This section also includes pro jected payments for income taxes, dividends, investments, and plant assets. * Financingsection—shows expected borrowings and the repayment of the borrowed funds and interest Why Prepare a Cash Budget? A cash budget is important for a variety of reasons. For one, it allows you to make management decisions regarding your cash position (or cash reserve). Without the type of monitoring imposed by the budgeting process, you may be unaware of the cycle of cash through your business. At the end of a year or a business cycle, a series of monthly cash budgets will show you just how much cash is coming into your company and the way it is being used. Seasonal fluctuations will be made clear. A cash budget also allows you to evaluate...
Words: 425 - Pages: 2
...TE AM FL Y THE JOSSEY-BASS Academic Administrator’s Guide to Budgets and Financial Management The Jossey-Bass Academic Administrator’s Guides are designed to help new and experienced campus professionals when a promotion or move brings on new responsibilities, new tasks, and new situations. Each book focuses on a single topic, exploring its application to the higher education setting. These real world guides provide advice about day-to-day responsibilities as well as an orientation to the organizational environment of campus administration. From department chairs to office staff supervisors, these concise resources will help college and university administrators understand and overcome obstacles to success. We hope you will find this volume useful in your work. To that end, we welcome your reaction to this volume and to the series in general, including suggestions for future topics. THE JOSSEY-BASS Academic Administrator’s Guide TO Budgets and Financial Management Margaret J. Barr Copyright © 2002 by John Wiley & Sons, Inc. All rights reserved. Published by Jossey-Bass A Wiley Imprint 989 Market Street, San Francisco, CA 94103-1741 www.josseybass.com No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission...
Words: 40350 - Pages: 162
...looked at the predicted and actual budgets for the business, I am going to give you some advice on how to manage your money more effectively which could start to help you and the business make a profit again. It is very important that you look after your cost and your budgets because you will be able to manage your finances; if you manage your costs you will be able to save more on your expenses which can then lead to increasing your revenue, for example if you controlled your costs you will be able to save money and then by having the correct amount of stock which can then be sold for money which will then bring extra money in so that you can spend that money on improving your business. If you didn’t look after your costs the amount that you spent on your expenses could impact on the amount of profit that you make. If you control your budget then you will be able to increase you income, you’ll be making sure that you have working capital and you will be able to set aside extra money when it is needed. You are over spending on the following things: stock, wages, administration, insurance, interest and loans, bank charges and repairs and maintenance. There are ways that you can adopt to make sure that the overspending stops. You could hire an accountant to help you structure you budgets, you could do research on what customers are demanding and the popular products that you do, you could look at your previous records and see where you went wrong and you also could look at your previous...
Words: 2403 - Pages: 10
...qualifications he will need to fast track his career. But Joseph needs to find a way to make some extra money on weekends to support his way through university. Joseph is considering whether he might establish a small mobile hamburger stall which he take to various places, markets and events, wherever crowds of hungry people are likely to be gathering and sell hamburgers. To set up his hamburger business, Joseph will have to borrow $10,000 to have a custom-made mobile hamburger stall with a built in refrigerator, gas bar-b-que plate, storage space for utensils and ingredients and sufficient work space. The National Australia Bank is prepared to lend the money to Joseph for the project over a three year period. Joseph will have to make repayments to the Bank of $480 per month. A local celebrity and once-upon-a-time television cook, Ms Jan Power runs a farmer’s market at the Brisbane Power House every Sunday. Joseph learns that he could rent a space at the Sunday farmer’s market for $200 per day. Joseph has also been estimating the cost of ingredients for his hamburgers. On a per, hamburger basis he thinks he can buy ingredients as follows: Ingredients | Cost per hamburger | Hamburger buns | $0.50 | Hamburger patties (meat) | $1.00 | Salad | $0.40 | Sauces and condiments | $0.05 | Disposable plates and napkins | $0.05 | Joseph thinks he will be able to sell his hamburgers for $4.00 each. But he needs to work out how many hamburgers he would need to sell to avoid...
Words: 5473 - Pages: 22
