Project budgets and reporting systems, Financial Management

Assignment Help:

Project Budgets and Reporting Systems:

In many cases, where a project is initiated and a budget allocated, a separate account is created to ensure costs attributable to that project are readily identified.  If a separate account was not commenced, expenditure would be spread across the general business accounts and an accurate breakdown of costs would be difficult to assess. The separate project account would include sub-accounts for areas of expenditure identified in the project budget.

Along with aligning budget items to accounts, once a budget is agreed and communicated to the staff who will manage them, a reporting system will need to be introduced to ensure budget information is relayed back to management.

Reporting systems of one form or another exist in most businesses, they can be as informal as a weekly meeting, or as formal as daily written reporting. Generally they reflect the personality of the business and the industry in which the business operates.

As a general guide however, for a reporting system to be effective it must:

  • Be unambiguous and clearly understood by all involved in the reporting chain
  • Provide for the establishment and delegation of clear lines of authority in the chain, such as who is authorised to adjust budgets and by how much
  • Detail what information needs to be collected and by whom
  • Detail how often this process is to occur
  • Detail how results are to be measured and interpreted and in what form are variances recorded
  • Detail how results are to be communicated once variances are reported and corrective courses of action taken
  • Advise on reporting action to management

Related Discussions:- Project budgets and reporting systems

Determine stock turnover, a)   Year 2 Year...

a)   Year 2 Year 1   Stock turnover (350/500) * 365 = 255.5 days (250/450) * 365 = 202.7 days

What are the types of inventory cost, What are the types of Inventory cost?...

What are the types of Inventory cost? Explain the elements of inventory cost also. Types: 1. Ordering cost    2. Holding cost Elements: 1. Unit cost  2. Reordering

Guaranteed income supplement, In addition to the public pension plans, Rob ...

In addition to the public pension plans, Rob and Ellen also have RRSPs.  What options will they have when they retire if they want to draw money from their RRSPs?  Identify one str

Discuss risk from perspective of capital asset pricing model, Discuss risk ...

Discuss risk from the perspective of the Capital Asset Pricing Model (CAPM). The Capital Asset Pricing Model or CAPM be able to be used to compute the appropriate required rate

What is profit maximisation criterion, Profit maximisation criterion P...

Profit maximisation criterion Profit maximisation criterion is unsuitable and inappropriate as an operational objective of financing, investment and dividend decisions of a fi

How industrial company inflate the value of its inventory, How can an indus...

How can an industrial company inflate the value of its inventory so as to decrease net income and the taxes is has to pay that year? If a company increases the value of its inv

Explain career counselling process, Q. Explain career counselling process? ...

Q. Explain career counselling process? The career counselling process should contain the following elements: a. The employee's should goals, aspirations and expectations wit

Compute the economic order quantity, Q. Compute the economic order quantity...

Q. Compute the economic order quantity? TNG has a current order size of 50000 units Average number of orders per year = demand/order size = 255380/50000 = 5·11 orders Ann

Explain about the investment decision- financial management, Explain about ...

Explain about the investment decision- financial management The investment decision relates to selection of assets in which funds would be invested by a firm. Assets which can

Perform appropriate ratio analyses on the balance sheet, Perform appropriat...

Perform appropriate ratio analyses on the balance sheet and income statements of your company using techniques discussed in chapter 2 of your textbook. Compare your company to a c

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd