Role of Budgets in Companies: A Report on Twin Rivers Café

FINANCE PROJECT

Contents
EXECUTIVE SUMMARY.........................................................................................................................3
MAIN BODY..............................................................................................................................................3
CONCLUSION...........................................................................................................................................6
REFERENCES............................................................................................................................................7

EXECUTIVE SUMMARY
The report summarize about role of budgets in companies. Basically, the financial plans
help in better allocation of monetary reports. The report abstracts information about objective of
budgets of Twin Rivers café as well as about variance between actual and estimated items. The
end part of report summarizes information regards to suggestions to enhance performance of
given business enterprise.
MAIN BODY
(a) Objective of preparing budget for Twin Rivers café.
Budget- The budget is a savings plan for a specified period of time, sometimes one year. It may
also involve expected sales volumes and profits, resource size, costs and expenses, properties,
obligations and cash flows (Savage, 2019). Business, governments, communities and other
groups use it to describe tactical action plans or activities in tangible terms. In the context of
above company they produce budget for below mentioned objectives:
 Keeping extra sight of eye over monetary performance- The main goal of creating
a budget is to use it as a framework for evaluating the efficiency of different
activities through the use of budget differences (Ilott, 2013). This is main
objective of budget because in accordance of it managers keep themselves in
touch of actual revenues. Such as in the Twin Rivers café, they analyze
performance by making variation between actual and budgeted activities.
 Controlling over expenses- This is one of the main objectives of preparing
budgets which is related to making effective control over different elements’ cost
(Barr and Turner, 2013). It becomes possible because by help of a proper
financial plan, managers of company allocate funds accordingly so that cost can
be minimized. Such as in the aspect of Twin Rivers café, their main objective is to
control overall expenses.
(b) Preparation of a report showing the company’s revenue and spending variance for July.
Planning Actual Variance
Budgeted meals quantity (q) 18000 17800 200A
Revenue (4.50 q) 81000 80100 900A
Expenses:
Raw material (2.40q) 43200 42720 480F