Budget Guidelines(Let us predict the future)

Financial and/or quantitative statement

Management's plan or blueprint, in structured form

Projects or anticipates the desired outcome

Contains policy to be pursued to attain given objective

What is a budget?

Estimated Revenues - What are the anticipated sources of revenue and how much can management realistically expect to receive?

Estimated Expenditures - How much does management expect to spend, and for what purposes are resources to be spent?

Components of budget

How funds are to be collected and spent

Provide a logical, detailed and realistic spending plan

A mean to identify and allocate limited resources

Importance

Prevents from overspending

Provides information on operations

Monitors and controls spending and revenue collection

Importance (cont..)

Goals and objectives for the coming year

What are current clients/vendors?

Historical information/trends

What is working well and what needs to be changed?

New clients/vendors

What destinations does the organization wish to support?

Future Prospects/Market Condition

How to begin?

What should I do?

strength

weakness

threat

opportunity

strength

strength

strength opportunity

opportunity

opportunityopportunity

opportunity

threat threat

threat

threat

threat

weakness

weakness

weaknessweakness

weakness

Identify your resources

Identify your resources (cont..)

or

Example

Customers Budgeted Business = 328,000

Share (amount) 1,000 65,000 4,500 112,500 72,000 60,000 13,000

Share (%) 5% 65% 15% 25% 60% 50% 65%

Capacity 20,000 100,000 30,000 450,000 120,000 120,000 20,000

Customer A B C D E F G

Department heads gather data/information by coordinating with whoever is dealing with relevant areas.

Data is reviewed and modified before being incorporated into the ‘proposed budget’.

Do the best

Budget should be discussed, modified, or challenged before being formally adopted.

Make it better

Proposed budget should be formally approved or adopted before start of next year.

Get it approved

Get ready for the action

Happy New Year

A comparison of actual operating results with the original budget would show the management comparison of:

What the organization did

What it initially planned to do

Locate the Best

Locate the Best (cont...)

Review Meetings:

Weekly

Monthly

Quarterly

Annual

Beat the winner

There may be situations where adjustments may be necessary in working methodology and/or in budget.

Lets change

Budget Adjustments (having proper justification)should be discussed and get it approved by the management.

Success path

Lets share

A budget that is carefully prepared, closely monitored and accurately interpreted can mean the difference between success and failure. Budgets will only be reliable if management routinely holds accountable its departments for strictly adhering to budgetary procedures.Budgetary goals and objectives should be clearly communicated to all responsible individuals, with the expectation that procedures be followed so as not to compromise or jeopardize.

Conclusion

Thank You