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

Market beta, The management of Nelson plc wish to estimate their firm’s equ...

The management of Nelson plc wish to estimate their firm’s equity beta. Nelson has had a stock market quotation for only two months and the financial management feels that it would

Explainthe principles of banking and finance, An introduction to the princi...

An introduction to the principles of banking and finance It covers a broad variety of topics using an economic perspective and aims to give a general background to any student

OPERATING CYCLE, discuss the applicability of operation cycle in avegetab...

discuss the applicability of operation cycle in avegetable growing business

Analytical way of viewing financial problems of a firm, Analytical way of v...

Analytical way of viewing financial problems of a firm The new approach is an analytical way of viewing financial problems of a firm. The main contents of this tactic are what

HOW TO MANAGE FINANCES?, What are the strategies in managing your finances?...

What are the strategies in managing your finances? How it should be monitor?

How do flotation costs affect cost of raising that capital, When a company ...

When a company issues new securities, how do flotation costs affect the cost of raising that capital? When a company issues fresh securities flotation costs, enhance the cost o

LPP, A paper mill produces two grades of paper viz., X and Y. Because of ra...

A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper i

The financial services authority in the united kingdom, The Financial Servi...

The Financial Services Authority in the United Kingdom: The Financial Services Authority (FSA) in the United Kingdom (UK) is the financial watchdog. It is a company limited by

List the main features of ordinary shares, Question 1 Describe the types o...

Question 1 Describe the types of investment decisions Question 2 List the main features of ordinary shares Question 3 List the assumptions of Walter's dividend model. Ex

Explain the term dividend cover, Dividend cover Dividend cover measure...

Dividend cover Dividend cover measures the relationship among earnings per share and net dividends per share. The higher the altitude of dividends for any given level of EPS t

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