Manage Finances within a Budget - Desklib

Manage finances within a
budget

TABLE OF CONTENT
SECTION 1......................................................................................................................................7
Q1 What is a budget and how does it help a business achieve its goals? ...................................7
Q2 What determines how business funds are divided amongst different departments and
project ?........................................................................................................................................7
Q3What is the difference between a fixed (static) and flexible (variable) budget? ....................7
Q4 What is a cash flow budget and what is it used for? .............................................................7
Q5 What is a profit and loss budget and what is it used for? ......................................................7
Q6 What is a budget cycle?.........................................................................................................7
Q7 What is a budget cycle? ........................................................................................................8
Q8 What must you do when budget priorities are changed? Explain why..................................8
Q9 Your budget allows only a limited amount of funding for wages. Who needs to know about
these types of resource decisions? Explain why..........................................................................8
Q10 List two ways you can promote awareness of the importance of budget control................8
Q11 How does promoting the importance of budget control help you achieve team or work
area goals? (Briefly explain 2 examples).....................................................................................8
Q12 Why is it important to record resource allocation? .............................................................8
Q13 Budgets are not the only source of information relating to where resources are allocated
and controlled within a business. List four other records used to show resource allocation.......8
SECTION 2......................................................................................................................................9
Q1 Why do we record and compare actual performance figures with budgeted figures? ..........9
Q2 How often should you check actual income and expenditure figures against budgets?........9
Q3 List six types of financial records you can use to check income and expenditure
information...................................................................................................................................9
Q4 What is one benefit of using computerised systems to maintain financial records?..............9
Q5 What are financial commitments in a business? ...................................................................9
Q6 List two examples of financial commitments for a business in your industry sector............9
Q7 There are four basic types of expenses you need to record in financial documents to ensure
accurate monitoring. Describe and give one example for each type...........................................9
Q8 What are the formulas used to calculate a budget variance and a budget variance
percentage?................................................................................................................................10

Q9 Check the figures in the sales budget below. Which department’s figures have been
calculated correctly?..................................................................................................................10
Q10 Indicate if the following budget results are a favourable or unfavourable result..............10
Q11 What are the four main reasons budget deviations occur? ................................................10
Q12 What factors do you need to consider when deciding whether or not a budget deviation
should be investigated further? ( Give 3 examples)...................................................................10
Q13 List three options you might consider to help manage budget deviations effectively.......10
Q14 List four types of information about budget targets you should discuss with staff
members.(Briefly explain them)................................................................................................11
SECTION 3....................................................................................................................................11
Q1 How does trend analysis help identify areas for improvement in budget performance? ....11
Q2 What are two questions you should be asking when assessing existing costs and resources?
....................................................................................................................................................11
Q4 What approaches or possible options can you investigate further to control and improve the
management of expenses in a business? (..................................................................................11
Q5 What approaches or possible options can you investigate further to control and improve the
management of payroll expenses in a business?........................................................................12
Q6 List three approaches or possible options you can investigate further to control and
improve the management of accounts payable in a business.....................................................12
Q7 List three main methods businesses use to increase their profits.........................................12
Q8 Providing recommendations for improved budget management and set new budget targets.
....................................................................................................................................................12
Q9 what is the impact of any changes must be considered when developing new approaches
or changes to budget management along with advantages and disadvantages .........................12
Q10 How should you present your recommendations for improved budget management? .....13
Q11 List three examples of the type of information you should include when presenting or
communicating about recommendations for budget management............................................13
SECTION 4....................................................................................................................................13
Q1 What information might you need to include when preparing a statistical or financial report
for the supervisors in a suburban hotel?....................................................................................13

Q2 What information might you need to include when preparing a formal statistical report for
the management team of a large events or reception centre along with example ?.................13
Q3 How can you present reports to enable informed decision-making along with example ?
....................................................................................................................................................14
Q4 How do you know when to complete reports? ...................................................................14
Q5 Explain how the features of accounting software programs can assist you to manage
budgets.......................................................................................................................................15
TASK 1..........................................................................................................................................16
Q1 list the hotel’s financial commitments under their correct cost category. Name at least two
commitments for each category.................................................................................................17
Q2 The four categories of cost in which most fund has been allocated by the hotel along with
June quarter amount ..................................................................................................................17
Q3 Why have significant funds been allocated to these categories? Discuss their importance
to the business and consequences if inadequate funds are allocated.........................................17
Q4 Using the Bistro departmental budget – April. You are holding a team meeting to discuss
the financial targets provided in the organisational and April bistro budgets. What information
do you need to communicate to the team to ensure they understand the targets and goals to be
achieved?....................................................................................................................................18
Q5 What techniques can you use to promote awareness of methods of controlling costs or
increasing sales so you can achieve budget targets?..................................................................18
TASK 2: CALCULATE VARIANCES .......................................................................................18
TASK 3..........................................................................................................................................22
Q1 Are there any significant variances in the sales figures that you should be concerned
about? Explain what the results indicate and why you are/are not concerned about them........22
Q2 Are there significant variances in any of the expenses categories that you think should be
investigated further? If yes, discuss which categories and why you think they need
investigation. If no, discuss why the deviations do not warrant investigation..........................22
Q3 Based on your responses to questions 1 and 2, what is your overall evaluation of the
budget results? Is the bistro meeting its financial targets? .......................................................22
Q4 Which expense category has the most funds allocated to it? Explain why it is important
you manage costs in this category carefully..............................................................................22

Q5 Using the results and information obtained from the April comparative report, your
answers to the previous questions and the background information.........................................23
Write a transcript of the outcomes of your report ready to deliver to the bistro staff at the next
team meeting. ............................................................................................................................23
The transcript should include the following information. The current status of the budget; is
the work area meeting its budget targets, is it on track to meet June quarter budget targets?
Which areas are underperforming or performing better than expected?What changes, if any,
need to be made to help the team meet next month’s budget targets?An outline of budget
targets for May. Organisational factors that contributed to the setting of these targets............23
REFERENCES..............................................................................................................................25

SITXFIN003 – Manage finances within a budget
Worksheets
SECTION 1
Q1 What is a budget and how does it help a business achieve its goals?
Budget is the estimation of the income and expenditure for a given set of time.
Its main purpose is helping a business, government or any other organization for making or
spending money.
Q2 What determines how business funds are divided amongst different departments and project ?
The fund manager is the person who ensures the management of the funds and their division in
the different department as per their needs and requirement for their operations.
Q3What is the difference between a fixed (static) and flexible (variable) budget?
Fixed budget is the plan which is considered to be useful for the single level of sales and also
helpful for the measurement of the activity (Arsani and Sihombing, 2020). However, the variable
budget is the changes which happens in the activity for the level of production units for the static
changes.
Q4 What is a cash flow budget and what is it used for?
Cash flow budget is the estimation of all the cash receipts and all the cash expenditure which is
expected the occurrence during a certain time period. It is used for estimation of monthly or
yearly cash income or expenditure which is well framed items.
Q5 What is a profit and loss budget and what is it used for?
It is a budget which is the summary of the expected income and expected expense which is
prepared for a shorted or a longer period depending on the use of the budget.
Q6 What is a budget cycle?
Financial Vaibliltiy is the ability of the generation of sufficient income for meeting operating
payments.
Profitability is the measurement of the profit of the business relative to its expenses for more
efficiency for realizing more profit as a percentage of its expenses.
Liquidity refers the ease which an asset or security has for the conversion of the ready cash for
affecting the market price.