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

What are the benefits of holding inventories, Q. What are the Benefits of H...

Q. What are the Benefits of Holding Inventories? (1) Timing of Demand and Supply: - Requirement to hold inventory of raw materials arises because it isn't possible for a firm

Computing hedge ratio: the modified duration method, Let us consider a situ...

Let us consider a situation wherein a position in an interest rate dependent asset such as a bond portfolio or a money market security is hedged by using an interest ra

Discount Pricing, Discount Pricing The T-bills are issued at a discount...

Discount Pricing The T-bills are issued at a discount to face value and hence have no coupon. Commission rates on round lots generally range from $12.50 to $25.00 per $1 mil

Interest rate risk for floating-rate securities, In a fixed-rate coup...

In a fixed-rate coupon bond, the change in the price can be attributed to the change in the market interest rates. This change is due to the difference in the pre

What is a sunk cost, What is a sunk cost?  Is it relevant when evaluating a...

What is a sunk cost?  Is it relevant when evaluating a proposed capital budgeting project?  Explain. A sunk cost is a cash flow that has already takes placed, or that will take

Public corporations ought to tender audited financial statem, What are some...

What are some of the government requirements imposed on a public corporation that are not imposed on a private, closely held corporation? Public corporations ought to tender au

Bajaj electronics caselet, how would you judge the potential profit of Baja...

how would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit?

Effect on stock valuation, Effect on Stock Valuation Until the 1960s, c...

Effect on Stock Valuation Until the 1960s, common stocks were viewed as a good instrument against loss caused by inflation. Also, before 1960, stocks were not providing full he

What are the operating and financing decisions of any firm, A firm's operat...

A firm's operating and financing decisions   Risk also results from decisions made within the company.  This risk is usually divided into two classes:  - Business risk is th

Concept of yield spreads, The Central Bank is an authority responsible for ...

The Central Bank is an authority responsible for monetary policy of its country. It regulates money supply and credit, issues currency, and manages exchange rate.

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