M4 Analyse the reasons why costs need to be controlled to budget.
D3 Evaluate the problems they have identified from unmonitored costs and budgets.
In this task I will be analysing the effects of budgeting on BSKYB and on businesses I will then
explain how managing budgets is good for a business, I will also talk about the possible
problems that can occur if budgets are not monitored.
The budget should be monitored regularly throughout the year: quarterly, monthly, or even
weekly. Reviewing the budget will help you identify problems before they cost the business
too much time or money. How often a business reviews the budget depends on the
businesses confidence in the figures and the risk associated with not meeting the budget.
For example, if a business must meet a certain budget in order to meet your loan
obligations, the risk of falling short is high. You might consider adjusting the current year’s
budget at various intervals throughout the year. Many businesses re-evaluate their budgets
halfway through the year. This way they can assess the actual results so far and adjust the
budget to more accurately represent
real expectations.
Problems if budgets are not monitored:
One of the most important steps in
running a business is to prepare a
budget for your business. Businesses
prepare budgets to help keep better
track of their money and where it is
being spent. While the entire idea of a
budget is a great idea it does not guarantee that there won't be any problems with the
budget. No matter how well prepared a budget is, many businesses find problems in the
budget. Problems in the budget can be due to numerous factors, such as not allocating
enough money to a certain part of your business or transposing numbers. Regardless of
what the problems they can be managed as long as you can recognize the potential
problems before they get out of hand.
Another major problem with budgets is that businesses sometime forget about the taxes
that they owe and prepare a budget based on money that they don't have. One thing a
business should watch for is that the money from sales taxes and employee withholdings
are not counted on the balance sheets as holdings, you should have a separate account for
sales tax revenue so that you can keep it separate from your sales revenue. You should also
have a separate account for the employee withholdings so that you don't accidentally count
it as money you currently have.
Another problem that arises with budgets is not setting enough money aside to cover all of
your costs for a certain project. Sometimes people ask for an amount less than what they
actually need in hopes that they will get the money. But because they don't have enough to
reach their goal they are not profitable in the end. How to recognize this problem is to look
at your budget and now your business, if you know you are going to need x amount of
pounds to complete the project and only y amount of pounds is written down you need to
correct that problem.
D3 Evaluate the problems they have identified from unmonitored costs and budgets.
In this task I will be analysing the effects of budgeting on BSKYB and on businesses I will then
explain how managing budgets is good for a business, I will also talk about the possible
problems that can occur if budgets are not monitored.
The budget should be monitored regularly throughout the year: quarterly, monthly, or even
weekly. Reviewing the budget will help you identify problems before they cost the business
too much time or money. How often a business reviews the budget depends on the
businesses confidence in the figures and the risk associated with not meeting the budget.
For example, if a business must meet a certain budget in order to meet your loan
obligations, the risk of falling short is high. You might consider adjusting the current year’s
budget at various intervals throughout the year. Many businesses re-evaluate their budgets
halfway through the year. This way they can assess the actual results so far and adjust the
budget to more accurately represent
real expectations.
Problems if budgets are not monitored:
One of the most important steps in
running a business is to prepare a
budget for your business. Businesses
prepare budgets to help keep better
track of their money and where it is
being spent. While the entire idea of a
budget is a great idea it does not guarantee that there won't be any problems with the
budget. No matter how well prepared a budget is, many businesses find problems in the
budget. Problems in the budget can be due to numerous factors, such as not allocating
enough money to a certain part of your business or transposing numbers. Regardless of
what the problems they can be managed as long as you can recognize the potential
problems before they get out of hand.
Another major problem with budgets is that businesses sometime forget about the taxes
that they owe and prepare a budget based on money that they don't have. One thing a
business should watch for is that the money from sales taxes and employee withholdings
are not counted on the balance sheets as holdings, you should have a separate account for
sales tax revenue so that you can keep it separate from your sales revenue. You should also
have a separate account for the employee withholdings so that you don't accidentally count
it as money you currently have.
Another problem that arises with budgets is not setting enough money aside to cover all of
your costs for a certain project. Sometimes people ask for an amount less than what they
actually need in hopes that they will get the money. But because they don't have enough to
reach their goal they are not profitable in the end. How to recognize this problem is to look
at your budget and now your business, if you know you are going to need x amount of
pounds to complete the project and only y amount of pounds is written down you need to
correct that problem.
