Manage budgets and financial plans
Assessment activity 1
1. Accurate records management is the first important task in the process of sound financial management or any small business operator. Accurate and regular financial information allows you to monitor the success or failure of a business and provides them with information to evaluate the consequences of their financial decisions. To be successful it is essential that you know the precise financial condition of your business. Accurate and regular financial information allows you to monitor the success or failure of your business and provides you with information to evaluate the consequences of your financial decisions. Regularly ...view middle of the document...
Historical data and reports from organisations information system will contribute to the development of realistic and achievable budgets and to the desig of financial plans for your team.
5. flexible budgeting allows for adjustments so that figures which depend on other figures are regulated if conditions change. That is, it is designed to allow changes and adjustments to cost levels so they match the levels of activity actually attained. It is a budjeting meathod that recodnises diffrences in the behaviour in fixed and variable costs in relation to fluctulations in output. It is more meaningful to compare the actual expenditure (to measure expenditure against income) with a flexed budget rather than a fixed budget.
6. No one can predict the future or how events beyond an organisation control will affect its ability to continue to operate. The businesses can prepare for events beyond their control. Organisations develop contingency plans sometimes called business continuity plans to identify unknown scenarios that may affect their operations such as earthquakes and other situations and how they will respond to each scenario. The purpose of a contingency plan is to
Allow an organisation to return to its daily operations as quickly as possible after a un-foreseen event. The contingency plan protects resources minimal customer inconvenience and identifies key strategic, assigning specific responsibilities in the content of the recovery. For example human resources may develop employee evacuation plans support employee benefits programs such as health care for worker compensation or hire temporary workers as needed. Contingency plans are both organisation wide and department specific. For example information services departments typically have a disaster recovery plan to protect restore and use company data including computer hardware software and instructional manuals. Contingency strategies can include considerations or possibilities such as
* Back up or alternative arrangements to ensure supply of required materials and stock.
* Rental hire purchase or alternative means of procurement of equipment and machinery.
* Contracting out or outsourcing human resource and other necessary functions or tasks.
* Organisational restructuring to reduce labour costs.
* Strategies for reducing costs wastage stack or consumables.
7. Team members should be actively involved in the contingency planning and should know what the plans are how to activate them and when to put them into operation. Up-date contingency plans each year as part of the normal planning or budgeting process. They can add valuable ideas to the creating the plans and they will also be aware of the processes should a plan need to be put into place
Assessment activity 2
1. The benefit of involving operational staff is that they may be able to lend perspective on particular line items. Sometimes when upper management looks at a budget they...