Monitor and Review Budget: Case Study, Issues, Variances, Performance, Recommendations

MONITOR AND REVIEW
BUDGET

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
CASE STUDY ................................................................................................................................1
Issues ...........................................................................................................................................1
Variances .....................................................................................................................................2
Performance ................................................................................................................................3
Recommendations .......................................................................................................................4
Evaluation ...................................................................................................................................4
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Organisations are required to monitor and review their budgets timely to ensure that
actual activities are going as per planned activities. It helps in ensuring that expenditures and
costs of the company are in line with the available resources. Budgetary control refers to the
process used for monitoring and reviewing the different budgets. Review of budget helps the
business to analyse the performance and taken further actions that are adequate and will increase
the efficiency of organisation. The present report is based on review and performance of the
budget. Present report will provide a budget variance report and details regarding the issues in
variances, performance, evaluations and recommendations identified from financial information
for company.
CASE STUDY
Issues
The budgets are prepared to provide company a defined path to follow and carry out
expenditures on that basis. Every organisation prepares budget after making proper analysis and
evaluation of different factors associated with the budget however some issues are not within
control and affects the business operations significantly. The issues in current case study are that
it has not made up to the expectations. The current economy is facing considerable recession
which can impact budgeted figures. The impact may continue over future quarters as consumer
spending reduces due to rising prices(Harelimana, 2017). There is significant increase in rate of
interest as Houzit is having variable interest loan that fluctuates with market conditions. It will
increase the interest burden on company with decrease in sales. This will tend to remain high till
the economic conditions of the country reach at stable stage.
It is also analysed that due to factors like school and public holidays will affect the sales.
It is planning to reduce the spendings on advertising which it made for promoting store offers.
The reduction in advertising cost will benefit the budget and enable to meet other expenses. It
will help in increasing sales but sales are proposed with discounts to attract the customers.
Company would face further decline in revenues with discounts and gross profit margins. This
will make it difficult for management to meet the expenditures with reduced gross profits. The
downturn in economy is main reason behind decrease in revenues as company has to provide
discounts to consumers (Kamau, Rotich and Anyango, 2017). Falling economic growth reduces
purchasing power of people and consumers restrict their purchasing affecting the sales.
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