Diploma of Management

Question: Discuss about how manage budget and financial plans. Answer: Performance objective The objective of the performance is to demonstrate the different financial approaches of the management. It shall include the management of the financial resources of the company. 1. Role Played by the Scenario Appendix 1 Big Red Bicycle company produces bicycles sold to the retailers in the domestic Australian Market. The structure of the senior management include the CEO, Managing director, Chief Finance officer, Operation general manager, senior accountant, sales general manager, production manager and the HR manager. The real goal of the company is to achieve net profit before tax worth $ 1000000. But, this goal is hampered by Economic downturn resulting into poor sales Expenses increases. In order to take the advantage of reduced cost, manufacturing overseas is considered by the company. It is also exposing in diversification of the range of products in order to avoid the poor sale of one of the product. Being the sales manager of team A, it is my responsibility to increase the sales of the company. Various measures will be undertaken by the Sales manager. He will access the information on budget on behalf of the team. It will be declared in budget to reduce the expenses and the economic downturn faced by the company. Budget will include the amount to be spend towards the expenses. The amount to be kept aside for the welfare of the company. Measures taken to reduce the economic downturn in order to reduce the poor sales. Sales of the company can be improved by providing suitable training to the employees of the company. Expenses such as the selling expenses, overhead expenses, should be reduced. This will help reduce the price of the product and thereby, helps the customer to purchase more. Team members are supported by the sales manager by providing suitable training to them to achieve the norms set in the budget. As, per the budget, it expects net profit before tax $ 1000000, which is possible with the help of proper planning, training to improve the skills of the employees, reduction in the expenses of the company, etc. Task A The overall financial objective of the business of the business with the help of budget is as follows- To achieve the financial need of the business To increase the net profit before tax to $ 1000000 To reduce the expenses incurred by the company To increase the profitability of the company To employ more number of skilled staff To employ more number of machines in the area of production. To advertise the products in order to create awareness among the general public. To expand the business The overview of the budget will be- To increase the production To increase the profit To provide training among the staff To reduce the expenses of the business Budget translate the expense allocation in the following manner- Cost of Personnel- It shall include the remuneration and salary and shall be calculated in the form of manmonth. Travel allowance- It include the cost of trip item wise. Vehicle expenses- It shall include the cost that is incurred to rent a car. It can be included into the travelling allowance. Equipments that are durable- Different views are set up by the funding agency. It is necessary to consider the policy of the agency before inclusion of such cost in the budget. Consumables- Enough money should be provided towards the consumables. Task B Bill Goodale will be responsible to track the petty cash expenses as well as other types of expenses. He knows how to prepare the spread sheet but is having least idea about how to use the formulae. He shall be provided training in the same. Some amount should be kept aside for providing training to the employees of the organisation. This will help in making them skillful and thereby, increases their productivity at the work place. 2. Access required budget information from relevant personnel Budget information is accessed in order to decide about the expenses to be incurred towards the personnel and to set aside some amount towards the training of the personnel. (YourArticleLibrary.com: The Next Generation Library, 2012) 3. Prepare to meet with your team member to communicate budget and then coach and train them in new role The above discussed are some of the points that will be included in the budget in order to improve the performance of the organisation. Budget is all about to be estimated the future performance of the company. As, the goal of the company is to earn $ 1000000, to reduce the expenses that are incurred such as selling expenses, by reducing the middleman expenses and expenses that are incurred on the advertisement of the products which are already known to the public and other expenses that are incurred in the process of production, etc. Thus, it is necessary to keep the team members aware of the same and to train them in the same by the keeping records in the spreadsheet maintained by the company. (YourArticleLibrary.com: The Next Generation Library, 2012) a. Determine organisational need The need of the organisation is to meet the goals set up in the budget. Its prime motive is to increase the profitability. Thus, it requires the employment of trained staff, reduction in the incurring of direct and indirect cost, etc. It need skillful staff to improve its productivity. Determination of the need of the organisation in the budget, helps to achieve the goals set up in the budget after a particular period say, after five years, etc. (Spreadsheetzone.com, 2016) b. Explain budget and relevance to team members accountabilities There are various reimbursements are provided in the organisation. Such as, for meal expenses, where the documents of expenses are attached with the reimbursement form. Amount can be reimbursed as described in the individual job. Authority to advance payment. For claiming the expenses, source document should be kept. Claims not adequately prepared will not be authorized. Reimbursement will not be allowed to the staff in the following case- Where there is late in the payment of penalty, fines, claim for tax deduction, non business expenses, etc. Travel expenses that include the insurance of the trip, routes that are indirectly taken will not be reimbursed. Travel expenses will be provided only for those routes which are direct. Allowance relating to mileage will not be subject to exemption. Expenses relating to accommodation which will include only the moderate expenses, personal expenses charged on to the account of the hotel will not be applicable for reimbursement. Thus, it is clear from the above that, budget is directly having its relevance with the team members accountability as it decides about the performance of the team member. (Spreadsheetzone.com, 2016) c. Identify coaching/ training needs of team member In order to improve the productivity and profitability of the organisation, it is necessary to provide training to the team member. Member who is not aware of the spread sheet so as to maintain the records should be provided training in the same. Proper planning and training to the team member helps in the allocation of the expenses and thereby, helps in proper financing of various department of the organisation. Training is provided to make the use of available fund in the particular area. This will help in the optimum utilization of the fund and thus, helps in the growth of the business. (Ba.uoregon.edu, 2016) d. Plan coaching/ training session and use appropriate coaching techniques Training Session can be provided to the employees based on the objectives set. It can be provided after office hour. This will help in carrying out the training without interruption in the routine work. Various coaching techniques can be used- face to face meeting, conduct of lectures, providing live demo or demo through internet, etc. Budget coaching can be given personally or with the community. (Ba.uoregon.edu, 2016) i. Outcome Spreadsheets are prepared to keep the records of the budget. It can be maintained in the following manner January February March April Income Income from business Total Expenditure Selling Expenses Distribution Expenses Total 0 Proper use of spread sheet and use of formulas such as of SUM is necessary to record the budget. ii. Inclusion of activities to instruct, practice, test and motivate Activities will be included that will instruct the staff how to perform as per the budget, make them practice to achieve the goals of the organisation, test the performance of the team members and helps to motivate them to put their best. e. Instruction, practice, testing and feedback on the petty cash excel spread sheet It is necessary to track the petty cash expenditures. These are the daily expenditures of the company. It helps the personnel of the Big Red Bicycle to pay small amount towards the petty cash expenditures. Testing up of petty cash excel spread sheet is done which will ensure its accuracy. Its testing is done based on the amount allocation towards this expenses and the usage of the same. After the testing is done, suitable feedback is asked from the team member in order to ensure equality of decision among them. Disbursement of petty cash shall be made by one of the team member. Petty cash need to be kept in safe. Proper receipt mush be issued of the same It should be properly recorded If the amount is more than $ 800, it has to be banked. Company shall record it as the miscellaneous expenses. (Managementhelp.org, 2016) References Ba.uoregon.edu. (2016). Spreadsheetzone.com. (2016).Petty Cash Management Tool. Managementhelp.org. (2016).All About Team Building. YourArticleLibrary.com: The Next Generation Library. (2012).What is an Outcome Budget?.