Task 8 – Evaluate budget management
Conduct a review of all aspects of the budgeting process undertaken in the previous tasks.
Include in the review:
the three or more sources of information used to conduct this review
all aspects of the process (setting, revising, monitoring and reporting)
areas that have been successful and why
areas where budget management could be improved and why
recommended improvements for setting the budget for the next financial year
Task 8: Evaluating budget management
In order to conduct review regarding budget management, various sources of information like finance journals, magazines, governmental website, online journals and educational textbooks have been used. These sources of information have been selected because they contain valid information and could be trusted as genuine sources of information. Some of these are:
Governmental website: Governmental website of different nations has proved useful regarding reviewing of budgeting process. They have provided requisite information regarding which points need to be considered for reviewing (da Cruz et al. 2016, p.874).
Finance journal: This journal specifically covers all areas related to domain of finance. Within these journals, one sub-topic is ‘budget’. In order to gather a detailed information regarding budget, Global Finance Journal had been main focus of study. This journal specifically has helped in gathering information necessary for reviewing budget. Major points of reviewing had been revealed in this journal.
Magazine: Multiple magazines had been studied to gather information regarding reviewing budget. Detailed readings had helped in drawing upon review plan and had helped in gathering knowledge regarding process of reviewing budgeting processes.
Setting: Setting up a budget had been a hard task. It required multiple considerations from a variety of viewpoints. It required detailed study of budget examples. However, in the end, a consolidated budget had been formulated.
Revising: This part was typically hard. Formation of budget was in itself hard. Revising it proved to be harder. Original budget had to be carefully studied to find out loopholes in it. Not every loophole was explicit (Ippolito, 2017). Implicit ones had to be scanned out by minutely going through budget details over and over again.
Monitoring: Budget monitoring had been a huge responsibility. It required focus and concentration. Several issues had cropped up which took time to solve. Constraints of budget had to be maintained carefully.
Reporting: This has comparatively been an easy part. It plainly required collecting information regarding progress of budget. However, collecting information needed careful approach. It had been made sure that information so collected and displayed have been valid and no kind of unethical practice has been entertained while formulating budget reports.
Budget had witnessed a huge success in various areas like marketing strategy, profits, total expenditure and other relevant areas. Marketing strategies had been nearly perfect that had helped in boosting sales volume. Profits have witnessed a healthy growth in steady manner. Total expenditure as agreed in budget has not crossed the established boundary. Reason behind this huge success is that budget has ben formulated by benchmarking it against best budgets existing in industry (Boyabatlı et al. 2015, p.230). This kind of approach has helped in creating a consolidated budget that had taken care of each area mentioned within budget. Furthermore, extra reserve of money had been maintained for the budget that had helped in tackling issues of sudden and emergency expenditures.
Though budget has been a huge success, there have been some gray areas in it. These areas have not been fully covered and have at times, created trouble. Marketing strategy though has been good overall, ran the risk of crossing its budget. Some of the activities have run uncontrolled because of which other marketing activities had to be cut short in order to remain within limits of budget (Mostenska, 2015, p.27). Staff cost had to be increased because of complaints by staffs regarding unjustified salary scale. This extra cost had been somehow managed by reducing expenditure in other areas of budget.
While setting budget for next financial year, following recommendations could be adhered to: