rajkaran,

04/12/2023 Free template from www.brainybetty.com 1

CONTROLLING EXPANSES BUDGETIG


CONTANT CONTANT

• Budgeting .• Budget .• Types of budget .• Purchasing .• Purchasing system .• Principle of

purchasing .

• Budgeting .• Budget .• Types of budget .• Purchasing .• Purchasing system .• Principle of

purchasing .

• Stage of purchasing .• Types of purchasing .• Phase of budgeting .• Forecasting .• Evaluation .• Wage .• Linens .

• Stage of purchasing .• Types of purchasing .• Phase of budgeting .• Forecasting .• Evaluation .• Wage .• Linens .


• Cost control in different areas .• MIRR .• Different forms .

• Cost control in different areas .• MIRR .• Different forms .


BUDGETING BUDGETING

• Budgeting in a business sense is the planned allocation of available funds to each department within company .

• Budgeting allows executives to control overspending in less productive areas and put more company assets into areas which generate significant income or good public relation .

• Budgeting in a business sense is the planned allocation of available funds to each department within company .

• Budgeting allows executives to control overspending in less productive areas and put more company assets into areas which generate significant income or good public relation .


• Budgeting is usually handled during meetings with accountants, financial experts and representatives from each department affected by the budgeting.

• Budgeting is usually handled during meetings with accountants, financial experts and representatives from each department affected by the budgeting.


BUDGET BUDGET

• A budget (from old French bougette, purse) is a financial plan and a list of all planned expenses and revenues .

• It is a plan for saving, borrowing and spending .

• A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods .

• In other terms, a budget is an organizational plan stated in monetary terms .

• A budget (from old French bougette, purse) is a financial plan and a list of all planned expenses and revenues .

• It is a plan for saving, borrowing and spending .

• A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods .

• In other terms, a budget is an organizational plan stated in monetary terms .


Types of Budget Types of Budget

• Sales budget .• Production budget .• Cash flow/cash budget .• Marketing budget .• Project budget .• Revenue budget .• Expenditure budget .

• Sales budget .• Production budget .• Cash flow/cash budget .• Marketing budget .• Project budget .• Revenue budget .• Expenditure budget .


Capital Budgeting Capital Budgeting

• The process in which a business determines whether projects such as building a new plant or investing in a long-term venture are worth pursuing .

• Oftentimes, a prospective project's lifetime cash inflows and outflows are assessed in order to determine whether the returns generated meet a sufficient target benchmark .

• The process in which a business determines whether projects such as building a new plant or investing in a long-term venture are worth pursuing .

• Oftentimes, a prospective project's lifetime cash inflows and outflows are assessed in order to determine whether the returns generated meet a sufficient target benchmark .


Methods Are Used In Capital

Budgeting

Methods Are Used In Capital

Budgeting• Accounting rate of return .• Net present value .• Profitability index .• Internal rate of return .• Modified internal rate of return .• Equivalent annuity .

• Accounting rate of return .• Net present value .• Profitability index .• Internal rate of return .• Modified internal rate of return .• Equivalent annuity .


Zero Base Budget Zero Base Budget

• Start each budget period afresh-not based on historical data .

• Budgets are zero unless managers make the case for resources-the relevant manager must justify the whole of the budget allocation .

• means that each activity is questioned as if it were new before any resources are allocated to it .

• Start each budget period afresh-not based on historical data .

• Budgets are zero unless managers make the case for resources-the relevant manager must justify the whole of the budget allocation .

• means that each activity is questioned as if it were new before any resources are allocated to it .


• Zero based budgets are designed to prevent budgets creeping up each year with inflation .

• Zero based budgets are designed to prevent budgets creeping up each year with inflation .


ADVANTAGE OF ZBB ADVANTAGE OF ZBB

• Forces budget setters to examine every item.

• Allocation of resources linked to results and need

• Develops a questioning attitude• Wastage and budget slack should be

eliminated• Prevents creeping budgets based on

previous year’s figures with an added on percentage.

• Forces budget setters to examine every item.

• Allocation of resources linked to results and need

• Develops a questioning attitude• Wastage and budget slack should be

eliminated• Prevents creeping budgets based on

previous year’s figures with an added on percentage.


DISADVANTAGE OF ZBB DISADVANTAGE OF ZBB

• It a complex time consuming process .• Short term benefits may be

emphasized to the detriment of long term planning .

• Affected by internal politics - can result in annual conflicts over budget allocation .

• It a complex time consuming process .• Short term benefits may be

emphasized to the detriment of long term planning .

• Affected by internal politics - can result in annual conflicts over budget allocation .


PURCHASING PURCHASING

• Purchasing refers to a business or organization attempting for acquiring goods or services to accomplish the goals of the enterprise.

• Though there are several organizations that attempt to set standards in the purchasing process .

• Purchasing refers to a business or organization attempting for acquiring goods or services to accomplish the goals of the enterprise.

• Though there are several organizations that attempt to set standards in the purchasing process .


PURCHASING SYSTEM PURCHASING SYSTEM

• A method used by businesses to buy products and/or services.

• A purchasing system manages the entire acquisition process, from requisition, to purchase order, to product receipt, to payment .

• A popular purchasing system is based on economic order quantity model .

• A method used by businesses to buy products and/or services.

• A purchasing system manages the entire acquisition process, from requisition, to purchase order, to product receipt, to payment .

• A popular purchasing system is based on economic order quantity model .


• Purchasing systems are a key component of effective inventory management in that they monitor existing stock and help companies determine what to buy, how much to buy and when to buy it .

• Purchasing systems are a key component of effective inventory management in that they monitor existing stock and help companies determine what to buy, how much to buy and when to buy it .


PRINCIPLES OF PURCHASING PRINCIPLES OF PURCHASING • Right quality .• Right quantity .• Right price .• Right time .• Right source of supply .

• Right quality .• Right quantity .• Right price .• Right time .• Right source of supply .


• Right quality:-• The house keeping department is

responsible for providing best services to the guest ,safe ,Attractive and luxurious environment.

• To provide a best service to a guest the department should supply a good quality products to the guest room and public areas.

• The particular items which we’re going to provide to a guest should meet the standards.

• Right quality:-• The house keeping department is

responsible for providing best services to the guest ,safe ,Attractive and luxurious environment.

• To provide a best service to a guest the department should supply a good quality products to the guest room and public areas.

• The particular items which we’re going to provide to a guest should meet the standards.


• Right quantity:-• Placing a purchase order of right

quantity is very important for any organization .

• A supplier’s lure of huge discounts for large quantities should not influence the department’s decision .

• Right quantity:-• Placing a purchase order of right

quantity is very important for any organization .

• A supplier’s lure of huge discounts for large quantities should not influence the department’s decision .


• The following factors should be kept in mind when ordering the right quantity of material.

• The cost of the order being placed .• Stock levels and order points .• Buffer stocks .• Budgetary controls .• Quantity discounts .

• The following factors should be kept in mind when ordering the right quantity of material.

• The cost of the order being placed .• Stock levels and order points .• Buffer stocks .• Budgetary controls .• Quantity discounts .


• Right price :-• To get the material on a right price is

very important for Housekeeping or any department .

• Before paying the bills it’s very necessary to know the market price of each material .

• Before calculating the right price think about the Duties , Taxes , Packaging ,The station of Dispatch . ETC.

• Right price :-• To get the material on a right price is

very important for Housekeeping or any department .

• Before paying the bills it’s very necessary to know the market price of each material .

• Before calculating the right price think about the Duties , Taxes , Packaging ,The station of Dispatch . ETC.


• Right time:-• The material should be made available

at the market at right time .• The time also should be right

ensuring immediate availability of a particular product in the market .

• Right time:-• The material should be made available

at the market at right time .• The time also should be right

ensuring immediate availability of a particular product in the market .


• Right source of supply:-• The right source of supply play a very

important roll . • The right source of supply is critical to

the execution of the other principles of purchasing .

• The selection of ideal supplier is very important for both the Housekeeping and the Purchase department .

• Right source of supply:-• The right source of supply play a very

important roll . • The right source of supply is critical to

the execution of the other principles of purchasing .

• The selection of ideal supplier is very important for both the Housekeeping and the Purchase department .


Stage of purchasing Stage of purchasing

• Pre – order stage .• Post – order stage .

• Pre – order stage .• Post – order stage .


• Pre – order stage:-• Receipt of purchase indent .• Floating of enquiries .• Procurement of samples for approval .• Quotation and ordering .

• Pre – order stage:-• Receipt of purchase indent .• Floating of enquiries .• Procurement of samples for approval .• Quotation and ordering .


Types of purchasing Types of purchasing

• Formal buying / competitive – bid buying .

• Wholesale buying .• Negotiated buying .• Cash on delivery buying .• Auction buying .• Blanket order purchasing .• Daily market purchasing .

• Formal buying / competitive – bid buying .

• Wholesale buying .• Negotiated buying .• Cash on delivery buying .• Auction buying .• Blanket order purchasing .• Daily market purchasing .


• Contract purchasing order / system contract .

• Stockless purchasing .• Cash and carry method .• Total plus purchasing .• Centralized purchasing .• Weekly / fortnightly purchasing .• Purchasing from van sales .

• Contract purchasing order / system contract .

• Stockless purchasing .• Cash and carry method .• Total plus purchasing .• Centralized purchasing .• Weekly / fortnightly purchasing .• Purchasing from van sales .


• Post – order stage:-• Issue of purchase order .• Confirmation of receipt of purchase

order .• Follow up .• Dispatch advice .• Receipt note .• Payment .

• Post – order stage:-• Issue of purchase order .• Confirmation of receipt of purchase

order .• Follow up .• Dispatch advice .• Receipt note .• Payment .


Phases of budgeting controlPhases of budgeting control• Planning stage• Forecasting • Evaluation phase

• Planning stage• Forecasting • Evaluation phase


PLANNING PLANNING

• This is the process of preparing the operating plans to achieve the predetermined objectives .

• The setting of objectives is fundamental to the generation of a budgeting business cycle .

• The objective can be general or specific , short-term or long-term.

• This is the process of preparing the operating plans to achieve the predetermined objectives .

• The setting of objectives is fundamental to the generation of a budgeting business cycle .

• The objective can be general or specific , short-term or long-term.


FORECASTING FORECASTING

• Forecasting is used by companies to determine how to allocate their budgets for an upcoming period of time.

• This is typically based on demand for the goods and services it offers, compared to the cost of producing them .

• Forecasting is used by companies to determine how to allocate their budgets for an upcoming period of time.

• This is typically based on demand for the goods and services it offers, compared to the cost of producing them .


EVALUATION EVALUATION

• Evaluation is the comparison of actual impacts against strategic plans .

• It looks at original objectives, at what was accomplished and how it was accomplished .

• Evaluation is inherently a theoretically informed approach .

• Evaluation is systematic determination of merit, worth, and significance of something or someone using criteria against a set of standards .

• Evaluation is the comparison of actual impacts against strategic plans .

• It looks at original objectives, at what was accomplished and how it was accomplished .

• Evaluation is inherently a theoretically informed approach .

• Evaluation is systematic determination of merit, worth, and significance of something or someone using criteria against a set of standards .


WAGE WAGE

• A wage is a compensation, usually financial, received by workers in exchange for their labor .

• Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees

• Compensation is a monetary benefit given to employees in return for the services provided by them.

• A wage is a compensation, usually financial, received by workers in exchange for their labor .

• Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees

• Compensation is a monetary benefit given to employees in return for the services provided by them.


• Investors utilize forecasting to determine if events affecting a company, such as sales expectations, will increase or decrease the price of shares in that company .

• Forecasting also provides an important benchmark for firms which have a long-term perspective of operations .

• Investors utilize forecasting to determine if events affecting a company, such as sales expectations, will increase or decrease the price of shares in that company .

• Forecasting also provides an important benchmark for firms which have a long-term perspective of operations .


Linens Linens

The exec. housekeeper is responsible for the storage, issuing, use and replacement of three main types of linen inventories

• Bed - sheets, pillowcases, mattress pads or covers .

• bath - bath towels, hand towels, specialty towels, wash cloths, fabric bath mats .

• table - table cloths, napkins, banquet linens for F&B .

The exec. housekeeper is responsible for the storage, issuing, use and replacement of three main types of linen inventories

• Bed - sheets, pillowcases, mattress pads or covers .

• bath - bath towels, hand towels, specialty towels, wash cloths, fabric bath mats .

• table - table cloths, napkins, banquet linens for F&B .


Cost Control In Specific AreaCost Control In Specific Area• Guest room and public areas .• Linen rooms .• Stores .• Horticulture .

• Guest room and public areas .• Linen rooms .• Stores .• Horticulture .


Guest Rooms:- Guest Rooms:-

• Staff must be trained to use cleaning supplies and equipment efficiently and economically .

• Wastage can often be reduced be physical observation and analysis of stock record .

• Multi skilled staff and giving them proper training to retain them controls expenses .

• Staff must be trained to use cleaning supplies and equipment efficiently and economically .

• Wastage can often be reduced be physical observation and analysis of stock record .

• Multi skilled staff and giving them proper training to retain them controls expenses .


• Saving of electricity .• Amenities should be placed in guest

room only after getting information .• Public areas can have motion sensors

to control power consumption .• In VIP rooms ,replace only those

flowers that are shedding petals instead of changing the entire arrangement .

• Saving of electricity .• Amenities should be placed in guest

room only after getting information .• Public areas can have motion sensors

to control power consumption .• In VIP rooms ,replace only those

flowers that are shedding petals instead of changing the entire arrangement .


Linen room Linen room

• Old white sheets may be cut up and used in Banquet halls as table clothes.

• Old shower curtains can cut and stitched into Aprons for butchery department .

• Condemned towels can be turned into dusters and mops .

• Old white sheets may be cut up and used in Banquet halls as table clothes.

• Old shower curtains can cut and stitched into Aprons for butchery department .

• Condemned towels can be turned into dusters and mops .


Stores Stores

• Effective stock taking and cost must be ensured .

• Physical inventory of stores is very important .

• Stores keys should be provided to a particular person who is authorized to open and close the store .

• Effective stock taking and cost must be ensured .

• Physical inventory of stores is very important .

• Stores keys should be provided to a particular person who is authorized to open and close the store .


Horticulture Horticulture

• A sprinkler should be installed for watering the lawn instead of using hose pipes .

• Dead plants, leaves can be composed.• This saves fertilizer cost as well a

making efficient use of waste .

• A sprinkler should be installed for watering the lawn instead of using hose pipes .

• Dead plants, leaves can be composed.• This saves fertilizer cost as well a

making efficient use of waste .


MIRR MIRR

• MIRR (Modified Internal Rate of Return) .

• It is a financial measure used to determine the attractiveness of an investment .

• It is generally used as part of capital budgeting process to rank various alternative choices .

• MIRR is modification of the financial measure Internal Rate of Return (IRR ).

• MIRR (Modified Internal Rate of Return) .

• It is a financial measure used to determine the attractiveness of an investment .

• It is generally used as part of capital budgeting process to rank various alternative choices .

• MIRR is modification of the financial measure Internal Rate of Return (IRR ).


• MIRR makes an explicit assumption about the rate of investment .

• IRR is not made to calculate negative cash flows after the initial investment .

• The modified internal rate of return assumes all positive cash follows are re-invested to the terminal year of the project .

• MIRR makes an explicit assumption about the rate of investment .

• IRR is not made to calculate negative cash flows after the initial investment .

• The modified internal rate of return assumes all positive cash follows are re-invested to the terminal year of the project .

rajkaran,

Business

budget allocation

types of budget sales

budget slack

budget line

budget period

base budget

expenditure budget

production budget