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Budget

Budget
And different types of Budget.

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    Rajkaran,     Rajkaran, Presentation Transcript

    • CONTROLLING EXPANSESBUDGETIG1/26/2012 Free template from www.brainybetty.com 1
    • CONTANT • Budgeting . • Stage of purchasing . • Budget . • Types of purchasing . • Phase of budgeting . • Types of budget . • Forecasting . • Purchasing . • Evaluation . • Purchasing system . • Wage . • Principle of • Linens . purchasing .1/26/2012 Free template from www.brainybetty.com 2
    • • Cost control in different areas . • MIRR . • Different forms .1/26/2012 Free template from www.brainybetty.com 3
    • BUDGETING • Budgeting in a business sense is the planned allocation of available funds to each department within company . • Budgeting allows executives to control overspending in less productive areas and put more company assets into areas which generate significant income or good public relation .1/26/2012 Free template from www.brainybetty.com 4
    • • Budgeting is usually handled during meetings with accountants, financial experts and representatives from each department affected by the budgeting.1/26/2012 Free template from www.brainybetty.com 5
    • BUDGET • A budget (from old French bougette, purse) is a financial plan and a list of all planned expenses and revenues . • It is a plan for saving, borrowing and spending . • A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade- offs between two or more goods . • In other terms, a budget is an organizational plan stated in monetary1/26/2012 Free template from www.brainybetty.com 6
    • 1/26/2012 Free template from www.brainybetty.com 7
    • Types of Budget • Sales budget . • Production budget . • Cash flow/cash budget . • Marketing budget . • Project budget . • Revenue budget . • Expenditure budget .1/26/2012 Free template from www.brainybetty.com 8
    • Capital Budgeting • The process in which a business determines whether projects such as building a new plant or investing in a long-term venture are worth pursuing . • Oftentimes, a prospective projects lifetime cash inflows and outflows are assessed in order to determine whether the returns generated meet a sufficient target benchmark .1/26/2012 Free template from www.brainybetty.com 9
    • Methods Are Used In Capital Budgeting • Accounting rate of return . • Net present value . • Profitability index . • Internal rate of return . • Modified internal rate of return . • Equivalent annuity .1/26/2012 Free template from www.brainybetty.com 10
    • Zero Base Budget • Start each budget period afresh-not based on historical data . • Budgets are zero unless managers make the case for resources-the relevant manager must justify the whole of the budget allocation . • means that each activity is questioned as if it were new before any resources are allocated to it .1/26/2012 Free template from www.brainybetty.com 11
    • • Zero based budgets are designed to prevent budgets creeping up each year with inflation .1/26/2012 Free template from www.brainybetty.com 12
    • ADVANTAGE OF ZBB • Forces budget setters to examine every item. • Allocation of resources linked to results and need • Develops a questioning attitude • Wastage and budget slack should be eliminated • Prevents creeping budgets based on previous year’s figures with an added on percentage.1/26/2012 Free template from www.brainybetty.com 13
    • DISADVANTAGE OF ZBB • It a complex time consuming process . • Short term benefits may be emphasized to the detriment of long term planning . • Affected by internal politics - can result in annual conflicts over budget allocation .1/26/2012 Free template from www.brainybetty.com 14
    • PURCHASING • Purchasing refers to a business or organization attempting for acquiring goods or services to accomplish the goals of the enterprise. • Though there are several organizations that attempt to set standards in the purchasing process .1/26/2012 Free template from www.brainybetty.com 15
    • PURCHASING SYSTEM • A method used by businesses to buy products and/or services. • A purchasing system manages the entire acquisition process, from requisition, to purchase order, to product receipt, to payment . • A popular purchasing system is based on economic order quantity model .1/26/2012 Free template from www.brainybetty.com 16
    • • Purchasing systems are a key component of effective inventory management in that they monitor existing stock and help companies determine what to buy, how much to buy and when to buy it .1/26/2012 Free template from www.brainybetty.com 17
    • PRINCIPLES OF PURCHASING • Right quality . • Right quantity . • Right price . • Right time . • Right source of supply .1/26/2012 Free template from www.brainybetty.com 18
    • • Right quality:- • The house keeping department is responsible for providing best services to the guest ,safe ,Attractive and luxurious environment. • To provide a best service to a guest the department should supply a good quality products to the guest room and public areas. • The particular items which we’re going to provide to a guest should1/26/2012 Free template from www.brainybetty.com 19
    • • Right quantity:- • Placing a purchase order of right quantity is very important for any organization . • A supplier’s lure of huge discounts for large quantities should not influence the department’s decision .1/26/2012 Free template from www.brainybetty.com 20
    • • The following factors should be kept in mind when ordering the right quantity of material. • The cost of the order being placed . • Stock levels and order points . • Buffer stocks . • Budgetary controls . • Quantity discounts .1/26/2012 Free template from www.brainybetty.com 21
    • • Right price :- • To get the material on a right price is very important for Housekeeping or any department . • Before paying the bills it’s very necessary to know the market price of each material . • Before calculating the right price think about the Duties , Taxes , Packaging ,The station of Dispatch . ETC.1/26/2012 Free template from www.brainybetty.com 22
    • • Right time:- • The material should be made available at the market at right time . • The time also should be right ensuring immediate availability of a particular product in the market .1/26/2012 Free template from www.brainybetty.com 23
    • • Right source of supply:- • The right source of supply play a very important roll . • The right source of supply is critical to the execution of the other principles of purchasing . • The selection of ideal supplier is very important for both the Housekeeping and the Purchase department .1/26/2012 Free template from www.brainybetty.com 24
    • Stage of purchasing • Pre – order stage . • Post – order stage .1/26/2012 Free template from www.brainybetty.com 25
    • • Pre – order stage:- • Receipt of purchase indent . • Floating of enquiries . • Procurement of samples for approval . • Quotation and ordering .1/26/2012 Free template from www.brainybetty.com 26
    • Types of purchasing • Formal buying / competitive – bid buying . • Wholesale buying . • Negotiated buying . • Cash on delivery buying . • Auction buying . • Blanket order purchasing . • Daily market purchasing .1/26/2012 Free template from www.brainybetty.com 27
    • • Contract purchasing order / system contract . • Stockless purchasing . • Cash and carry method . • Total plus purchasing . • Centralized purchasing . • Weekly / fortnightly purchasing . • Purchasing from van sales .1/26/2012 Free template from www.brainybetty.com 28
    • • Post – order stage:- • Issue of purchase order . • Confirmation of receipt of purchase order . • Follow up . • Dispatch advice . • Receipt note . • Payment .1/26/2012 Free template from www.brainybetty.com 29
    • Phases of budgeting control • Planning stage • Forecasting • Evaluation phase1/26/2012 Free template from www.brainybetty.com 30
    • PLANNING • This is the process of preparing the operating plans to achieve the predetermined objectives . • The setting of objectives is fundamental to the generation of a budgeting business cycle . • The objective can be general or specific , short-term or long-term.1/26/2012 Free template from www.brainybetty.com 31
    • FORECASTING • Forecasting is used by companies to determine how to allocate their budgets for an upcoming period of time. • This is typically based on demand for the goods and services it offers, compared to the cost of producing them .1/26/2012 Free template from www.brainybetty.com 32
    • EVALUATION • Evaluation is the comparison of actual impacts against strategic plans . • It looks at original objectives, at what was accomplished and how it was accomplished . • Evaluation is inherently a theoretically informed approach . • Evaluation is systematic determination of merit, worth, and significance of something or someone using criteria against a set of standards .1/26/2012 Free template from www.brainybetty.com 33
    • 1/26/2012 Free template from www.brainybetty.com 34
    • WAGE • A wage is a compensation, usually financial, received by workers in exchange for their labor . • Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees • Compensation is a monetary benefit given to employees in return for the services provided by them.1/26/2012 Free template from www.brainybetty.com 35
    • • Investors utilize forecasting to determine if events affecting a company, such as sales expectations, will increase or decrease the price of shares in that company . • Forecasting also provides an important benchmark for firms which have a long-term perspective of operations .1/26/2012 Free template from www.brainybetty.com 36
    • Linens The exec. housekeeper is responsible for the storage, issuing, use and replacement of three main types of linen inventories • Bed - sheets, pillowcases, mattress pads or covers . • bath - bath towels, hand towels, specialty towels, wash cloths, fabric bath mats . • table - table cloths, napkins, banquet linens for F&B .1/26/2012 Free template from www.brainybetty.com 37
    • 1/26/2012 Free template from www.brainybetty.com 38
    • 1/26/2012 Free template from www.brainybetty.com 39
    • 1/26/2012 Free template from www.brainybetty.com 40
    • Cost Control In Specific Area • Guest room and public areas . • Linen rooms . • Stores . • Horticulture .1/26/2012 Free template from www.brainybetty.com 41
    • Guest Rooms:- • Staff must be trained to use cleaning supplies and equipment efficiently and economically . • Wastage can often be reduced be physical observation and analysis of stock record . • Multi skilled staff and giving them proper training to retain them controls expenses .1/26/2012 Free template from www.brainybetty.com 42
    • 1/26/2012 Free template from www.brainybetty.com 43
    • • Saving of electricity . • Amenities should be placed in guest room only after getting information . • Public areas can have motion sensors to control power consumption . • In VIP rooms ,replace only those flowers that are shedding petals instead of changing the entire arrangement .1/26/2012 Free template from www.brainybetty.com 44
    • Linen room • Old white sheets may be cut up and used in Banquet halls as table clothes. • Old shower curtains can cut and stitched into Aprons for butchery department . • Condemned towels can be turned into dusters and mops .1/26/2012 Free template from www.brainybetty.com 45
    • Stores • Effective stock taking and cost must be ensured . • Physical inventory of stores is very important . • Stores keys should be provided to a particular person who is authorized to open and close the store .1/26/2012 Free template from www.brainybetty.com 46
    • Horticulture • A sprinkler should be installed for watering the lawn instead of using hose pipes . • Dead plants, leaves can be composed. • This saves fertilizer cost as well a making efficient use of waste .1/26/2012 Free template from www.brainybetty.com 47
    • 1/26/2012 Free template from www.brainybetty.com 48
    • MIRR • MIRR (Modified Internal Rate of Return) . • It is a financial measure used to determine the attractiveness of an investment . • It is generally used as part of capital budgeting process to rank various alternative choices . • MIRR is modification of the financial measure Internal Rate of Return (IRR ).1/26/2012 Free template from www.brainybetty.com 49
    • • MIRR makes an explicit assumption about the rate of investment . • IRR is not made to calculate negative cash flows after the initial investment . • The modified internal rate of return assumes all positive cash follows are re-invested to the terminal year of the project .1/26/2012 Free template from www.brainybetty.com 50
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