Manage Budgets and Financial Plan - Desklib

MANAGE BUDGETS AND FINANCIAL PLAN
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Table of Contents
Assignment 1: Plan financial management approaches...................................................................4
Task A..............................................................................................................................................4
Expenses Allocation.....................................................................................................................5
A policy of expense reimbursement.............................................................................................5
The policy of Petty Cash..............................................................................................................5
Task B..............................................................................................................................................5
Requirement of training...............................................................................................................5
Assignment 2 Implement financial management approaches.........................................................6
Task A..............................................................................................................................................6
Task B..............................................................................................................................................7
Assignment 3: Monitor and control finance....................................................................................9
Task A..............................................................................................................................................9
Task B............................................................................................................................................11
Contingency Plan.......................................................................................................................11
Variance of Budget....................................................................................................................13
Assignment 4: Review and evaluate financial management processes.........................................14
Task A............................................................................................................................................14
1. The Average Debtor days......................................................................................................14
2. The Average Creditor days....................................................................................................14
3. The Average Stock Turnover.................................................................................................14
Recommendation.......................................................................................................................14
Task B............................................................................................................................................15
1. Calculation for required units................................................................................................15
2. Calculation of variable costs..................................................................................................15
Recommendation.......................................................................................................................16
Task C............................................................................................................................................16
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GST Liability.............................................................................................................................16
Task D............................................................................................................................................17
Action Plan.................................................................................................................................17
Task E............................................................................................................................................17
Accounting Principle..................................................................................................................17
Cash Flow..................................................................................................................................17
Ledger and financial statement..................................................................................................18
Profit and loss statement............................................................................................................18
References......................................................................................................................................19
Appendix 1: Budgeted Value.........................................................................................................20
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Assignment 1: Plan financial management approaches
Task A
Budgeting is a long-term planning procedure that helps in estimating the value of income and
expenditure that could be incurred in a business project in the future. Most of the companies
generally formulate various types of the monetary plan according to the policy that makes the
income and expenses on project accordingly to facilitate the budgeted project. The budget helps
in forecasting the sales and demand for a project in a market. An importance of budget is stated
below
1. It helps the company management in performing, controlling and reviewing the
expenditure and income
2. By making comparison of the result of actual expenditure with budgeted results would
help in ensuring the performance of a plan
3. It helps in taking an action regarding the disparity that occurs from the action plan and
expenses of budget
When the above-mentioned importance are followed for achieving the target of a company, then,
the estimated prepared master budget of Big Red Bicycle could be said to be accurate,
understandable, achievable and fair (Newberry, 2015).
As per the master budget of Big Red Bicycle, the sales in a budget of each quarter are shown as
fixed to $ 750000. However, in new project, the budgeted sales at quarter 2 has been mentioned
as $ 1000000. Another quarter is mentioned to be 30 percent less than compared to quarter 2
which indicates the Quarter 1, 3 and 4 to be sales forecasting of $ 70000 each. As mentioned in a
scenario that sales of a new project decrease due to the economic downturn. Therefore sales of a
budget could be poor.
The direct wages are deducted from the sales in each quarter that results to $ 50000 as a fixed
amount. After deducting the cost of goods sold from sales in each quarter remains $ 1000000 as
mentioned to be fixed. However, commission on a percentage of sales is the shown to increase
by 2 or 2.5 percent of sales. According to the changes in commission on sales forecast the
changes in sales quarter 1, 3 and 4 is $ 75000, whereas quarter 2 incur the changes in the
commission of $ 25000.
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