Budget Preparation, Financial Management, and Risk Assessment Report

This report provides a comprehensive overview of budget preparation and financial management, focusing on the fictional company Houzit. It begins with an introduction to budgeting and its importance, followed by a detailed analysis of the company's financial performance, including reasons for past profits and losses. The report then delves into existing financial management approaches, assumptions, and bases for budgeting. It covers statutory requirements for tax compliance, including current requirements and liabilities, and provides insights into financial management software options. Furthermore, the report examines key accounting principles relevant to budget preparation, such as the time period principle, matching principle, and full disclosure principle. It also discusses the implications of probity in financial management and suggests critical dates, initiatives, and recommendations for items to include in the budget. The report concludes with a discussion of improved financial risk management systems and references relevant literature.

Prepare Budgets

Contents
INTRODUCTION...........................................................................................................................1
Task..................................................................................................................................................1
Procedure (Part A)...........................................................................................................................1
Develop budget notes that include:..............................................................................................1
Appendix 4: Prompt questions.........................................................................................................2
Statutory requirements for tax compliance..................................................................................2
Current compliance requirements and liabilities.........................................................................2
Financial management software..................................................................................................3
Principles of accounting..............................................................................................................4
Discuss the implications of probity.............................................................................................5
Critical dates and initiatives.........................................................................................................6
Recommendation for inclusion of items......................................................................................6
Improved financial risk management systems.............................................................................6
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

INTRODUCTION
Budget is a systematic plan of estimated plan of expenses and income which are depended on the
future objective and plans that helps internal manager to attain the desired goals within specific
resources (Johnstone, 2018). In this report, different sorts of budgets are prepared in order to
determine the net profit or loss company is facing within a year. Sales and profit budgets, cash
flow budget etc. help company to make a decent decision for future investment so that maximum
return can be gained that increase overall financial performance.
Task
Procedure (Part A)
Develop budget notes that include:
Reasons for last year profits and losses
 The old spreadsheet displays the total income and expenses which provide data about the
company actual operational revenues and expenditures. Such as: CGS = 16971237 –
7297632= 963760.
 It defines the total funding requirements for the upcoming time.
 Helps to predict the patterns of sales and income.
 Determine the breakeven point.
 Help in monitoring the changes.
Existing financial management approaches
Considerable measure financial organisation must displace fleeting disaster organisation,
particularly as to open promise ridges and insufficiency organisation.
Assumptions and Basis
 Upgrade suppositions of total spending.
 Review again and again all the possible bottlenecks
 Determine all the available subsidizing.
 Make sure all the office spending plans are as per the updated model.
 In last, load all the data within budgetary program.
Relevant notes
Implementation:
Major activities: Revenue mobilisations, release of funds.
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Major Actors: Finance ministry, RAMFC, Civil society
Audit
Major activity: Establish money value, Summary of income and expenses, Decrease the impact
of losses.
Major Actors: Auditor General, National planning commission, The national, state and local
government.
Appendix 4: Prompt questions
Statutory requirements for tax compliance.
Current statutory requirements Decrease the risk and increase efficiency Increase reliability and build effective control over company process. Internal manager can work more closely over growth and business platforms.
List of tax liabilities
 Tax payable for franchises and accrued income.
 Accrued payables taxes.
 Employer actual health coverage payable
 Tax payables for sales
 Regular bills for month such as insurance, rent etc.
Calculation method of tax liabilities Deferred Method Assets liability method Implication of valuation Allocation Deferred tax liability treatment
Current compliance requirements and liabilities.
In the context of Houzit the compliance legal requirements as well as liabilities are
basically divided into categories:
Internal requirements:
 Corporation: It includes updated laws, issuance of share to shareholder as well as
recording every stock items within stock trade.
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 LLCs: This means company maintain a reschedule work declaration, issue of enrolment
offers, trade premium for investment etc.
 Compliance kit: It consider company interest trade history and confirmation, LLCs seal
as well as test meeting results.
External requirements:
 Annual report: This report defines all the business and non-business happening of a
company within a year as well as charges regarding clarification of different monetary
and non-monetary aspects.
 Cost of obligations: Annual establishment and clarification of charges help to address
ceaseless necessities so that company can make monetary arrangement for the same.
 Franchise tax: It depends upon business salaries and total shares as well as standard
quality for company evaluation (Maas, Schaltegger and Crutzen, 2016).
Financial management software.
The below mentioned are some methods for commercially accessible FAS from which Houzit
can select the most suitable:
Suitable category of FAS
 To handle the financing of a small firm or a broad investment account, select a
professionally approved software.
 Pick a share (is a family budget management program or take account of financial cash
savings.
 To maintain a specific saving account, select a free and open source application.
Evaluation of FMP
Determination the suitable frameworks that are required within a commercially licensed financial
management program.
Find the features offered in a Personal finance software shareware or freeware
 Compile a list including its tasks of financial management that conduct most frequently.
 To currently available software products are contrasted against both the scope of existing
and prioritized specifications.
Comparison
Ariba Discount professional Quorum capital budgeting tracking
Ariba, a SAP company, offers an integrated All through the programme, Ouorum financial
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program that handles the purchased electricity
electronically to measure and prepay
promotions to selected suppliers, optimizing
the return. The app needs company
distributors should be on this platform, which
is really the world's largest toolbox for trading
partners (Nassar and et.al., 2020).
planning retains an internal review. Metrics
could be customised by users. Furthermore,
users may use various parameters, like benefit
centre or vendor, to grind up as well as review
documents.
Principles of accounting.
Some of the important accounting principles which can be implemented by the Houzit in
preparing budgets are discussed below:
Time period principle: During time principle is the last day to going that perhaps a corporation
should announce the deferred effects of its operations involving money throughout a typical day
though year, which would be typically fortnight, annually, or regularly. Just use principles of
commonly agreed accounting standards including International 0inancial reporting requirements
to document trades within each year until the scope within each fiscal quarter is defined. In day
and age protected by the statement should enter the headers of a budget pronunciation of Houzit's
boss. For instance, the clarification of payments or the description of cash streams can include
the 8 weeks ended August 31. The Annual Record, though, is calculated from the start of a
particular date instead of the scope of the years. As desired, as of August 31, a gain report
heading can state the actual position of company.
Matching principle: A few of the basic secret rules in reporting was its organizing fundamental
principle. The planning norm requires a company to record an expenditure in the very same time
allocation as the associated salaries on its compensation regulation. Manager must recognize that
many of an organization agreements are produced by agreements professionals (reps) who
receive a 10 percent fee to plot the scheduling norm (Rodrigues, Pigosso and McAloone, 2016).
On the fourteenth week of the month following, the fees for both the transactions within each
registration number month were charged to a reps. Good example, if the organization has
$60,000 in December deals, on January 15, the organization can pay expenses of $6,000. Mostly
on December pay explanation similar to the relevant December deals of $60000, the coordinating
law demands that $6000 of compensation spending be reflected. On December 31, this really is
likely to be helped by a modifying section that costs transaction cost and compensation profits
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due for $6000. The organizing method is related to the compilation system for reporting and
changing entries. The organization will record the $ 6000 payment cost in January even without
properly test, where it is charged rather than December where the expenditure as well as the
contribution are remembered.
Full disclosure principle: The full implementation law communicates that every knowledge
that might affect the interpretation of such claims by a follower must be fused into a material
cash-related statements. The understanding of this norm is highly judgmental, because it is
conceivable that the calculation of the knowledge that could be presented is huge. It is normal to
simply reveal details about activities that are likely to actively impact the money status or fiscal
consequences of products to decrease the metric of representation. This transparency can mix
items that have not yet been specifically measured, such as the proximity of a verbal altercation
over such a cost role with an organisation material or just after the act that are part of present
case. In addition, full transparency means that Houzit manager can consistently report current
accounting plans, as well as any modifications to such methods, such as modifying an advantage
cash equivalent from the methods stated in the financial statements for a previous era. Some
examples of total transparency are:
 The essence and rationale of a reform in the theory of accounting
 The essence of a non-monetary exchange
 The essence of a partnership with a minority shareholder at which the firm has a large
amount of transactions
 The quantity of funds overburdened
 The sum of content losses induced by cost reductions or business law losses
 A summary of any commitments for asset withdrawal
 Information and conditions that trigger impairment of goodwill
In a number of ways in the annual report, including in the proposed budget details in the balance
sheets and income statements, or even in the corresponding reports, the administrator may
provide this detail (Mazumder, Bhadoria and Deka, 2017).
Discuss the implications of probity.
In the context of Houzit, it is stated that Cash-related integrity is the effect of authenticity
when fixing and having ready spending agreements. It requires protecting that there has been
absolute caused mainly with no attention paid on whether something is export or in some kind of
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path by the benefits company. In addition, it is important that every aspect of it is true to nature
met properly when cash-related dedication is involved (Trianni, Cagno and Farné, 2016).
Critical dates and initiatives.
Some of the important date related to company are mentioned below:
 31/12/2011 issuance of loan amount $100000.
 11/2010, budget for advertisement increased by $70000.
 11/2010, increase in wages and salaries by $172500.
Recommendation for inclusion of items
Below mentions are some important items that are recommended for inclusion within budget
sheet at the end of year which makes meaningful results for company:
 Transportation
 Staff salaries and amenities
 Offices overheads and relevant expenses
 Water and other bills
Improved financial risk management systems.
The altered internal management which help company to improve management plans is as
follows:
 Manager of Houzit have to properly follow all regulation and legal rules.
 There must be proper implementation of every rule so that efficiency of company can be
better in future.
 All the involved sheets for time of employee and operation as well as entire hours of
working or operation must be recorded in specific manner that increase the risk taking
capacity of company (Lupton, 2015).
Conclusion
In last of report, it is founded that budgets of different categories are very much useful and
beneficial for company which support in predicting expenses and revenues for upcoming time.
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References
Books and Journals.
Johnstone, L., 2018. Theorising and modelling social control in environmental management
accounting research. Social and Environmental Accountability Journal, 38(1), pp.30-48.
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability assessment,
management accounting, control, and reporting. Journal of Cleaner Production, 136.
pp.237-248.
Nassar, A and et.al., 2020. Relevance of blood loss as key indicator of the quality of surgical
care in laparoscopic liver resection for colorectal liver metastases. Surgery, 168(3).
pp.411-418.
Rodrigues, V. P., Pigosso, D. C. and McAloone, T. C., 2016. Process-related key performance
indicators for measuring sustainability performance of ecodesign implementation into
product development. Journal of Cleaner production, 139. pp.416-428.
Trianni, A., Cagno, E. and Farné, S., 2016. Barriers, drivers and decision-making process for
industrial energy efficiency: A broad study among manufacturing small and medium-
sized enterprises. Applied Energy, 162. pp.1537-1551.
Lupton, D., 2015. Data assemblages, sentient schools and digitised health and physical education
(response to Gard). Sport, Education and Society. 20(1). pp.122-132.
Mazumder, S., Bhadoria, R. S. and Deka, G. C., 2017. Distributed Computing in Big Data
Analytics. AG: Springer International Publishing.
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