Agree a budget
Unit 330 Agree a Budget
Before developing a draft budget I have the previous financial year’s budget, income statements and the cash flow for my consideration within the future budget. It was really helpful although the new orders are due within the next year and I had to recalculate income and variable expenses. I have prepared a list of all the incomes and expenses and put them together to use as estimations for developing a draft budget. This list should always be prepared before the start of our financial year (1st of October).
I have created a list of all the expenses categorised separately in materials, salaries, electricity, office stationery, rent and rates, insurance, etc. Then I have prepared an estimated expense list by using a previous year’s expenses for reference, also created a list of all the incomes including income from net sales and other income which I linked with the list of expenses. After creating a list with a previous year’s reference, I have added other expenses I want to implement in this financial year.
When prioritising items on the budget, I have looked thoroughly into each item and its importance for our company. The most important expenses to run our organisation smoothly is materials, salaries for staff, electricity, rent and the less important is office supplies, advertising.
When all priorities identified it is beneficial for us as it helps to manage the available money in a very effective manner. Also we can effectively monitor the performance of our company to see if the goals and objectives have been met. Identifying priorities when preparing a budget can be beneficial for example if any error that has occurred in the budget decisions or any low performance in business due to ineffective budgeting can be used to improve the decision making process in the future. The other effective identification of priorities will help me to set up future budgets more accurately.
After the identifying the priorities and resources
Before developing a draft budget I have the previous financial year’s budget, income statements and the cash flow for my consideration within the future budget. It was really helpful although the new orders are due within the next year and I had to recalculate income and variable expenses. I have prepared a list of all the incomes and expenses and put them together to use as estimations for developing a draft budget. This list should always be prepared before the start of our financial year (1st of October).
I have created a list of all the expenses categorised separately in materials, salaries, electricity, office stationery, rent and rates, insurance, etc. Then I have prepared an estimated expense list by using a previous year’s expenses for reference, also created a list of all the incomes including income from net sales and other income which I linked with the list of expenses. After creating a list with a previous year’s reference, I have added other expenses I want to implement in this financial year.
When prioritising items on the budget, I have looked thoroughly into each item and its importance for our company. The most important expenses to run our organisation smoothly is materials, salaries for staff, electricity, rent and the less important is office supplies, advertising.
When all priorities identified it is beneficial for us as it helps to manage the available money in a very effective manner. Also we can effectively monitor the performance of our company to see if the goals and objectives have been met. Identifying priorities when preparing a budget can be beneficial for example if any error that has occurred in the budget decisions or any low performance in business due to ineffective budgeting can be used to improve the decision making process in the future. The other effective identification of priorities will help me to set up future budgets more accurately.
After the identifying the priorities and resources