University Budgeting Project: SITXFIN004 Prepare and Monitor Budgets

This document presents a comprehensive project on preparing and monitoring budgets, likely for a hospitality or business course (SITXFIN004). The project analyzes budget scopes, identifies key stakeholders (departmental heads and financial managers), and discusses internal and external factors impacting budgets, such as economic conditions and market trends. It includes estimations for income and expenditure, considering hotel objectives like occupancy rate increases and cost minimization. The project explores budget preparation using a bottom-up approach, involving all staff members. It also outlines essential policies, procedures, and strategies for budget review and monitoring, including allocation adjustments and cost-cutting measures. References to relevant academic sources support the analysis.

Running head: PREPARE AND MONITOR BUDGETS
Prepare and Monitor Budgets
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

1PREPARE AND MONITOR BUDGETS
Table of Contents
Answer to Question 1:................................................................................................................2
Answer to Question 2:................................................................................................................2
Answer to Question 3:................................................................................................................2
Answer to Question 4:................................................................................................................3
Answer to Question 5:................................................................................................................3
Answer to Question 6:................................................................................................................4
Answer to Question 7:................................................................................................................4
Answer to Question 8:................................................................................................................4
Answer to Question 9:................................................................................................................5
Answer to Question 10:..............................................................................................................5
References:.................................................................................................................................6

2PREPARE AND MONITOR BUDGETS
Answer to Question 1:
The scope and nature of budgets are to be ascertained with relevant colleagues, as
consultation with them might lead to surprising outcomes. This is because ideas and
suggestions could be obtained in relation to waste management, recommendations for
improvement of supplier performance and efficient usage of resources (Barr and McClellan
2018). At the time of sharing information, the financial objectives should be related to
performance along with building on self-management concept leading to increased
productivity and discretionary efforts.
Answer to Question 2:
For the hotel, the relevant colleagues would include departmental heads and financial
managers. The valuable input of the departmental heads would be to fulfil the customer
expectations, while the valuable input of the financial managers would be budget restrictions.
Answer to Question 3:
The following are the major internal and external factors having potential impact on
budget:
 Management and organisational restructures
 New regulation or legislation
 Organisational objectives
 Growth or downfall in economic conditions
 Considerable movement in price for various items or commodities
 Shift in market trends
 Venue availability and event costs

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 Project scope
 Human resource needs
Answer to Question 4:
Based on the provided scenario, the following estimations are made in relation to
income and expenditure:
 The sales revenue is expected to increase by 30% over the next year
 Interest income amounting to $5,000 is expected to earn by the next year
 Human resource expenses would increase by 7%
 The cost of sales and other expenses would be reduced by 12% so as to offset the
increase in human resource costs
Answer to Question 5:
For the budget preparation, the hotel objectives have been taken into consideration,
which include the following:
 Rise in occupancy rate from 65% to 80%
 Accomplishing sales target from $5,475,000 to $7,300,000 per year
 Providing effective services to meet the needs of the guests
 Minimisation of costs and expenses by 10% by applying strategies of cost
management

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Answer to Question 6:
Answer to Question 7:
According to the above table, a favourable net income is observed to earn, as the
revenues would increase inevitably after the first quarter. However, for ensuring this success,
the bottom-up approach to budgeting could be used, in which all centre managers and staffs
would involve in the budgeting process (Enow and Kamala 2016). In this approach, all
members would be eligible to provide feedbacks and raise objections by considering other
factors like rise in interest rates, inflation and others.
Answer to Question 8:
In order to consider budget preparation aspects, the following policies and procedures
are increasingly important:
 Formulating objectives and goals

5PREPARE AND MONITOR BUDGETS
 Obtaining information
 Preparing budget
 Analysing performance
 Undertaking remedial measures
 Improving budget
Answer to Question 9:
The following budget review and monitoring strategies could be applied:
 Rise or decline in allocations
 Cost cutting decisions like retrenchment of employees and closure of departments
 Diversification decisions like employment of additional staffs, opening of new
departments or outlets and others (Segun and Olamide 2015)
Answer to Question 10:
The draft budget should be accompanied by performance from past periods and
financial proposals from the major stakeholders. Accordingly, it would be presented to the
colleagues and managers to evaluate whether it needs additional considerations (Van Der
Wagen and White 2018).

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References:
Barr, M.J. and McClellan, G.S., 2018. Budgets and financial management in higher
education. John Wiley & Sons.
Enow, S.T. and Kamala, P., 2016. Cash management practices of small, medium and micro
enterprises in the Cape Metropolis, South Africa. Investment Management and Financial
Innovations, 13(1), pp.230-236.
Segun, A. and Olamide, F.T., 2015. The global debate on budgeting: Empirical evidence
from Nigeria. Business Management Review, 13(1), pp.99-124.
Van Der Wagen, L. and White, L., 2018. Event management: For tourism, cultural, business
and sporting events. Cengage AU.