Manage budget and financial plan Essay Sample
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Introduction of TOPIC
A budget is an estimation of revenue and expenses over a specified future period of time. It is compiled and re-evaluated on a periodic basis. The master budget is the aggregation of all lower level budget produced by a company’s various functional areas and, also includes budgeted financial statement, a cash forecast, and a financing plan. A master budget is the central planning tool that a management team uses to direct the activities of a corporation, as well as to judge the performance of its various responsibility 8centers. The master budget includesː
In task ː 1 the role is a manager of sales center A based in Adelaide. the sales manager have provided a master budget in which total expenses was $ 547250. the center A has the large staff the center is expected to sell as much volume as the other two sales centers put together.
In the master budget prepared by the senior accountant. As we see the present master budget the total expenses or total revenue is divided equally in all four quarters and this is .absolutely unexpected. It is mentioned that sales are 30% less in all quarter compared to quarter 2. If it Is so then the sales of all quarter cannot be $ 375000. this is will not show the correct view of that particular quarter. it is also mentioned that sales of quarter 2 depend upon the completion of 90% of repair and maintenance but the uniform of $ 6250 is just confusion if we consider pointing no 3 that the actual sales in the quarter are $ 1000000. it is also mentioned that the sales commission has increased by 2.5%. which will pull down the profit The expenses which are directly related to sales should be shown particular to that quarter so that it will be easy to calculate actual profit and we can improve in next quarter. The forecast of 20% lower the sales volume is expected to bring down the profit. it is also mentioned that the enterprise can bear variance of 10% in the profit figure. Variance more than that could affect the company ability to pay obligation and investment. if such happens it will hamper the goodwill of the organization. The software system that MYOB accounting system generating variance from excel can be easily editable. ː
The contingency plan is prepared in assessment booklet.
Big Red Bicycle is bicycle manufacturer based in Bendigo, Victoria. The company produces bicycles which are sold to retailers in the Australian market.
The main objectives and goal of the or
ganization are as follows ː To Manufacture in overseas to take advantage of reduced costs.
The stakeholder of an organization and their role are as follows
Employees ː perform day to day task
Managerː develop plans and budget
owners ː approve the business plan.
As organization have various needs to achieve some of them are as follows ː
Growth and development
Today’s work environment requires employees to be skilled in performing complex tasks in an efficient, cost-effective, and safe manner. Training is needed when employees are not performing up to a certain standard or at an expected level of performance. The difference between actual the actual level of job performance and the expected level of job performance indicates a need for training. The identification of training needs is the first step in a uniform method of instructional design.
To identify the training needs following points should be analysis
look at the current skills levels of your staff.
identify the skills/knowledge gaps within the business.
decide which new skills could take your business forward.
plan for appropriate training to bridge those gaps.
Many methods of training are available. Here we list the different methods of training ː
Performance management is a process by which managers and employees work together to plan, monitor and review an employee’s work objectives and overall contribution to the organization following strategies as the keys to a successful performance management program.
Reward Top Performers
Update Job Descriptions
Training & Development
Establish and Review Milestones
Monitoring and evaluation plans should be created after the planning phase and before the design phase of a programme or intervention. The plan should include information on how the programme or intervention will be examined and assessed. Generally, the plan should outline:
the underlying assumptions on which the achievement of programme goals depend
the anticipated relationships between activities, outputs, and outcomes
well-defined conceptual measures and definitions, along with baseline data
the monitoring schedule;
a list of data sources to be used
cost estimates for the monitoring and evaluation activities
a list of the partnerships and collaborations that will help achieve the desired results
a plan for the dissemination and utilization of the information gained.
As a manager of sales center A, the provided petty cash fund of $ 800 is not enough and the accountant is not well trained and he is not able to maintain accounts properly which will result in the downfall of organization. So he should be properly monitored and provide different training.
Cost Center A Master Budget FY 2016/2017 FY Q1 Q2 Q3 Q4 REVENUE Sales 1,787,500 262,500 1,000,000 262,500 262,500 Commissions (2% sales) 22,000 5,500 5,500 5,500 5,500
Direct wages fixed 100,000 25,000 25,000 25,000 25,000 Cost of Goods Sold 200,000 50,000 50,000 50,000 50,000 Gross Profit 1,465,500 182,000 919,500 182,000 182,000 EXPENSES General & Admistrative Expenses Accounting fees 10,000 2,500 2,500 2,500 2,500 Legal fees 2,500 625 625 625 625 Bank charges 300 75 75 75 75 Office supplies 1,000 250 250 250 250 Postage & printing 200 50 50 50 50 Dues & subscriptions 250 63 63 63 63 Telephone 3,000 750 750 750 750 Repairs & maintenance 25,000 6,250 6,250 6,250 6,250
Payroll tax 12,500 3,125 3,125 3,125 3,125 Marketing Expenses Advertising 100,000 25,000 25,000 25,000 25,000 Employment Expenses Superannuation 22,500 5,625 5,625 5,625 5,625 Wages & salaries 100,000 25,000 25,000 25,000 25,000 Staff amenities 10,000 2,500 2,500 2,500 2,500 Occupancy Costs Electricity 20,000 5,000 5,000 5,000 5,000 Insurance 50,000 12,500 12,500 12,500 12,500 Rates 50,000 12,500 12,500 12,500 12,500 Rent 100,000 25,000 25,000 25,000 25,000 Water 15,000 3,750 3,750 3,750 3,750 Waste removal 25,000 6,250 6,250 6,250 6,250 TOTAL EXPENSES 547,250 136,813 136,813 136,813 136,813 NET PROFIT (BEFORE INTEREST & TAX) 918,250 45,188 782,688 45,188 45,188 Income Tax Expenses (25% Net) 229,563 11,297 195,672 11,297 11,297 NET PROFIT AFTER TAX 688,688 33,891 587,016 33,891 33,891