financial management activities
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FINANCIAL MANAGEMENT ACTIVITIES
By-Ashish Agrawal
Shri Ram Murti Smarak College Of Engineering & Technology,Bareilly,
INDIA
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FINANCIAL MGMT.
• A judicious use of capital & a careful selection of sources of capital , in order to enable a spending unit to move in the direction of reaching its goals.
• Cost benefit analysis to achieve best quality.• Ensures optimum fund utilization
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Growth of funds
Allocation of funds
Creation of funds
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BUDGETING
• Planning & controlling the activities of an organization.
• Financial plans for the objectives during the period covered by budget
• Predicted on the base of historical data otherwise market or assumptions.
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Budgeting methods-
1.Incremental-last year figures are used as the basis for new budget.
2.Zero base-starts with a blank piece of paper-zero base. Every expense has to be evaluated & decided if it should be made, as well as what the cost should be.
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Budgeting process-
• Sales and marketing budget
• Production budget
• Administrative budget
• Investment budget
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ACCOUNTING
• Defining the cost elements• Cost element structure should be compatible with the
methods adopted by business• How the organization will spend the money• Amount for particular activities
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CHARGING
• For internal costs• Related to billing for activities in organization as –
internet connection • billing customers for the delivered services in order
to recover revenue• To recover all the costs incurred
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Charging policy-
• Communication of information
• Pricing flexibility
• Notional charging
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Rates-(Setting of Rates)
• Determining market rates• Analyzing demand for services• Analyzing number of customers and the
competition• Determining direct & indirect costs
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REPORTING
Costs are addressed in the regular meetings with the customer under the SLM . Hence , SLM is provided with-• IT services expenditure per customer.• Charging & accounting methods used.• Difference between estimated & actual charges.• Charging disputes with causes & solutions.
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THANK YOU