Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Budgeting presentation

13,630 views

Published on

Budget preparation Process

  • Be the first to comment

Budgeting presentation

  1. 1. BUDGETING A management ToolA quantitative economic plan in respect of a periodof time (2012) – Used by XYZ management to manage the firms operation and finances.
  2. 2. Component Revenue Expenses Cash Capital• (Based on Flexibility, Integration & Accountability)
  3. 3. Format Of Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TotalA. Beginning Cash BalanceB. Cash Inflows (Income Billings 2012 Fees collected 30 Days - (40%) 60 Days- (20%) 90 Days- (15%) C. Cash Outflows (Expenses Expenses, Operation Cost, Fixed & Variable D. Other Cash Out Flows: Capital Expenditure/ Drawings FinancingCosts Ending Balance (A+B) – (C+D)
  4. 4. Background 2011 @ XYZ
  5. 5. Where we are Currently 2012- Quarter 1……. XYZ ADVOCATE QUARTER 1 BILLINGS AND COLLECTION- 2012 CONSOLIDATED ( M)BRANCHES QUARTE Quarter 1Months/descri R 1 Actual Budget Varianception JAN FEB MARBillings 9.6 10.0 22.2 41.9 71.6 (29.9)Collections 5.6 9.1 8.1 22.8 40.7 (22.6)Income savedfromdisbursements .7 - - .7 - -Total Income 6.2 6.1 6.1 18.5 40.7 (21.9)Expenses 5.0 6.0 6.5 17.5 30.9 13.4
  6. 6. BENEFITS OF A BUDGET1 • MAPPING.2 • CONTROLLING.3 • CO-COORDINATING..4 • COMMUNICATING.5 • INSTRUCTING.6 • AUTHORISING7 • MOTIVATING.8 • PERFORMANCE MEASUREMENT.9 • DECISION-MAKING.
  7. 7. Why we need budget & budgeting @ XYZHelp us identify risk & opportunity for the following year
  8. 8. BUDGETING PROCESS- @XYZ Objectives: Mngt/hr/ac Execution ct Plan: Assumption KPI, KRI, Roll upContingency Strategy:- : Expand. Back up Sales/Pple Plan BUDGETING Walk forward / Constraint: Defense : Competitio Quantify n, PB, Risk% Costs Opportuniti es Methodology Calculation: Plan- Dev- Sales, P&L, Revw
  9. 9. BUDGETARY CYCLE XYZ Budget Cycle Budget Policy Setting-Exe Committee Nov. 1st Week Budget Review (Every Quarter) Budget Preparation Exe.Committee/Finance Nov 20th 2012 Budget Reporting Budget and Monitoring Authorization(Monthly for BMP) 18th Dec 2012 Budget Implementation Jan 6th 2013
  10. 10. Application of BudgetWhat are we currently doing?i. Commitment vs. Compliancei. Commitment to generates productive behavior without the need for monitoring
  11. 11. XYZ, Budget Review Leveli. We Link the budget to performance appraisalii. We Bridge the gap Identified for flexibilityiii. Evaluate the degree of achievement every month for consistencyiv. Apply needed remedy or compensating control in line with HR Recommendation
  12. 12. BUDGET AS A MANAGEMENT TOOL……..HOW?a. If a branch/Unit meet the budget, no significant deviation- Set New Targetb. Exceeds the budget, BMP-under-commit - over-perform- Set New Strategiesc. Lags behind the budget, over-commit but under-perform- Review Strategies
  13. 13. Presented by the Finance Manager: XYZ Thank You Milton-ochieng@hotmail.co.uk

×