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Identifying Sources of Information for Budget

Task 3 – Set a realistic budget in line with

organisational requirements

Part 1

Use a range of sources of information to set your budget. These must include both internal

and external sources of information.

Part 2
Consult with relevant people in the organisation to check assumptions.
Gain agreement for the draft budget with at least two relevant stakeholders. Gaining
agreement can be an iterative process involving revisions and redrafts of the original budget.
The evidence supporting this task should reflect this natural process.

Part 3
Evidence your actual budget and any revisions and redrafts separately. Provide narrative
to explain its place within the larger context of the master budget and how it meets
organisational requirements.

Answer

Task 3: Setting a realistic budget

A. Sources of internal and external information

Sources   (internal and external) - summary of gathered information and key points
Source 1Internal reports like sales reports and financial statements have   revealed that sales rate is average, assets value is greater than liability   value and net profit increases as years pass 
Source 2Market condition is external source of information that has revealed   that existing market has become Red Ocean and that there is need to search   for emerging markets that have Blue Ocean condition 
Source 3Employee interaction is an internal source of information. This has   revealed that they have not been too much comfortable with work because of   lack of technological tools and aids
Source 4Customer records are internal sources of information. It has been   revealed that orders placed by customers have been huge in the past and they   prefer to make online payments rather than paying in cash
Source 5Existing competitors are external sources of information. It has been   found that they are functioning quite well, there is fierce competition and   big players have grabbed big market share


B. Consulting for checking assumption

Stakeholder or   stakeholder
group name:

Media
Date of   meeting:

03/10/2019
Record what you   have done
to secure their   agreement
for the budget   and be sure
that it   includes realistic
assumptions and   forecast:
They have been kept updated regarding progress of budget. All budget   details have been honestly portrayed to them. This has helped in securing   their agreement for budget. It is expected that they will continue to support   our budget till its completion
Stakeholder or   stakeholder
group name:

Government Bank
Date of   meeting:

07/10/2019
Record what you   have done
to secure their   agreement
for the budget   and be sure
that it   includes realistic
assumptions and   forecast:
Necessary papers have been mortgaged to acquire their trust.   Furthermore, budget details including predicted profitability have been   clearly explained to them so as to secure their agreement for the budget. It   is expected that they will continue to fund for budget as long as budget   progress healthily


C. Explanation for budget

Master budget

This budget is a kind of conglomeration of miniature budgets that are synthesized as a wholesome to create an overall budget. Master budget contains components like cost overhead, labour cost, material cost, sales volume, profits and staff welfare. 

Actual budget within master budget and conformation to organizational requirements

Actual budget had been formulated on a small scale basis that targets the marketing section of business. It is a part of master budget where it lays down principles for effective marketing strategies and cost effectiveness to be achieved while following marketing-related activities. As far as organizational requirements are concerned, actual budget has been aligned with them. It has been decided that marketing will particularly aim at expanding market, penetrating market, brand promotion and boosting sales that are major objectives for this organization. In order to achieve this, amount of money to be spent on marketing products has been clearly stated in budget and marketing strategies to be followed has been clearly delineated.

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