Objectives and Benefits of Budgeting in London Docks Cafe

Assessment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
A. Objectives and benefits of the budgeting in context to London Docks Cafe:.........................3
B. Report which shows revenues and expenses of London Docks Cafe's for the September:....4
C. Which areas of activity should be concern to the management of London Docks Cafe's:.....5
D. The terms profitability and sustainability:..............................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Budgeting is the process of making plans in order to spends money. It is pre estimation of
expenses and income which is used in firms activities. It is the planning, organising, managing
funds according to the pre estimation. It provides roadmap to the employees how they are
generating activities and they creating plans according to this so that they can work efficiently. It
helps managers for overview of activities. It helps for comparing actual performance from
expected performance. The company which is selected for this report is the London Docks Cafe.
It is deals in preparing meals for tourists and citizens. This report covers topics such as
objectives, benefits of budgeting, revenue and expenses variances for the company, concern
about the areas for the management of the company. Apart from this it also covers topics such as
profitability and sustainability (Becker, 2016).
MAIN BODY
A. Objectives and benefits of the budgeting in context to London Docks Cafe:
There are various objectives of the budget which are mentioned below:
 Provide structure: Budgeting provides the structure for the firms activities which has to
done by employees. It gives roadmap to them how they have to utilise the resources. It
shows all revenues and expenses as expected manner. According to its managers provides
the instruction to the employees. It gives structure for activities includes production, HR,
sales department. In context to London Docks Cafe's, It includes terms sales, expenses
includes raw material, wages and salary, utilises, facility rent, insurance, fuel etc. which
gives results as net profit income (de Andrés, de Fuente and Martín, 2015).
 Predict cash flows: Budget helps company it provides direction to it for its activities. It is
useful in those companies which are growing rapidly, which have seasonal sales. This
provides brief about estimating how much cash it requires and periodic cash related
things. It is helps in predicting cash flows for the future.
 Allocate resources: The budget process is tools which helps in deciding where the firms
has to allocate its funds for its various activities including fixed assets purchase. It gives
direction to employees how much they need to spend in specific activity for better
utilisation of resources in order to accomplish business objectives.

 Measuring performance: It helps managers for measuring performance of the employees
while they are work according to estimation. It allows them to better utilisation of
resources. Budgeting helps company for managing funds as per the requirements. It helps
in comparing actual performance from expected performance. By using resources well it
helps in increasing profitability which leads to accomplish its objectives (Downes, von
Trapp and Jansen, 2018).
Benefits of the budgeting for the London Docks Cafe's are mentioned below:
Benefits of Budgeting for London Docks Cafe-
 Better planning- The use of Budgeting is helpful for London Docks Cafe because it can
lead towards better planning. Its use can be made to prepare Short-term, Medium-term
and Long-term plans for the future. Thus in this way the management will be able to
make sure that plans can be applied in the right manner.
 Better efficiency- With the use of Budgeting the management of London Docks Cafe are
able to identify the areas where the efficiency level can be enhanced. In this way the
managers will be able to achieve the goals and objectives in the right manner.
 Manage money : it helps in managing money efficiently as it provides structure of
expenses and revenues. Employees works according to the pre decided manner.
 It allows business to capitalize opportunities.
 It helps firms for identify appropriate growth level and plan for achieving that growth.
 It allows business for anticipating limitations and ways to overcoming from them.
B. Report which shows revenues and expenses of London Docks Cafe's for the September:
This report is based on the company London Docks cafe's which leads for tourists and
citizens. This provides budget for its activities as actual performance and actual performance.
This budget includes expenses and income for the September. It includes revenues and expenses
which includes sales, expenses includes raw material, wages and salary, utilises, facility rent,
insurance, fuel etc.
As per the its budget it shows revenues for the September month as per the planning it estimates
20000 and the actual sales was 18000 the 2000 is the variances for the company it can be reason
for less utilisation of resources. As per the its expenses the actual raw material purchase by the
company is 45000 and expected was 50000 that means firm has less expenses as per its sales.
Firms wages and salary for its employees shows as actual 10000 but the expected was 10500 this