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

Pre-requisites for effective budgetary control system, ORGANISATION FOR BUD...

ORGANISATION FOR BUDGETARY CONTROL (or) PRE-REQUISITES FOR THE INTRODUCTION OF AN EFFECTIVE BUDGETARY CONTROL SYSTEM 1.   BUDGET CENTRE:  It is a section of the organization

Estimate the most systematic risk, Yang Su is considering the following inf...

Yang Su is considering the following information on two stocks:                                                                              Rate of Return State of Economy

Agency problem, Discuss how a business might limit agency problem between m...

Discuss how a business might limit agency problem between management and creditors

Organization and management pattern of uti, Organization and Management Pat...

Organization and Management Pattern of UTI UTI has a full-time Chairman with an Executive Trustee reporting to him. The Executive Trustee looks after the Corporate Office, Zona

What are the time dimensions of the income statement, What are the time dim...

What are the time dimensions of the income statement, the balance sheet, and the statement of cash flows? Hint: Are they videos or still pictures?  Explain. Sol. The i

Cost of equity from new common stock, Weaver Chocolate Co. expects to gain ...

Weaver Chocolate Co. expects to gain $3.50 per share during the present year, its expected dividend payout ratio is 65%, its expected constant dividend growth rate is 6.0%, and its

Leverage, what is the meaning of market feasibility? What are its different...

what is the meaning of market feasibility? What are its different types with their degree?

Valuation an option-free bond with the tree, Let us construct a binom...

Let us construct a binomial interest rate tree for a 5.5% option free bond taking Table 3 as the binomial interest rate tree. Table 1 shows the various values in

What is investment decision, Q. What is Investment Decision ? Investmen...

Q. What is Investment Decision ? Investment Decision: - Investment decision as well known as 'Capital Budgeting' is related to the selection of long-term assets or projects in

Case study.., This case has been framed in order to test the skills in eval...

This case has been framed in order to test the skills in evaluating a credit request and reaching a correct decision. Perluence International is large manufacturer of petroleum and

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