BUDGETING - PART 1 In Luke 14: 28-31, we see our Lord Jesus Christ illustrating the concept of Budgeting. Luke 14:28 – 31(KJV); For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him, Saying, This man began to build, and was not able to finish. Or what king, going to make war against another king, sitteth not down first, and consulteth whether he be able with ten thousand to meet him that cometh against him with twenty thousand? What is a Budget? 'A quantitative expression of a plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. (CIMA Official Terminology, 2005) What is Budgeting? Budgeting is about making plans for the future, implementing those plans, and monitoring activities to see whether they conform to the plan. Essentials of Budget · Organisational structure must be clearly defined and responsibility should be assigned to identifiable units within the organisation. · Setting of clear objectives and reasonable targets. Objectives should be in consonance with the long term plan of the organisation. · Objectives and degree of responsibility should be clearly stated and communicated to the management or person responsible for budgeting. · Budgets are prepared for the future periods based on expected course of actions. · Budgets are updated for the events that were not kept into the mind while establishing budgets. Hence, budgets should be flexible enough for mid- term revision. · The entire organisation must be committed to budgeting. · Budgets should be quantifiable and master budget should be broken down into various functional budgets. · Budgets should be monitored periodically. Variances from the set yardsticks (standards) should be analysed and corrective action taken. · Budgetary performance needs to be linked effectively to the reward system. The Budget setting Process · Prioritisation of objectives identified in the planning process; · Assessment/quantification of total available resources, both financial and non-financial. The overall corporate budget is likely to include income from several different sources: o direct earnings; o income from investments; o donations; o grants; o other regular income sources (expected tax rebates etc.); o non-recurrent windfalls. · Identification and quantification of the inputs and processes (physical/managerial etc) required to fulfil the stated objectives and the associated financial resource required. · Assignment of proportion(s) of the total resources necessary to acquire/manage inputs to achieve the stated objectives. Each dedicated proportion of the total resource constitutes a 'budget'. Features of an effective budget To operate as an effective management tool, budgets should have the following qualities. · Fair - There is a significant danger in setting performance targets by reference to previous budgets. Reliance on incremental budgeting can result in a limited awareness of changing operating conditions and relationships. A wider and independent perspective is valuable; · Participative - All available experience and knowledge should be drawn on as well as increasing the concept of budget ownership; · Even-handed - Resource allocation decisions should reflect the priority levels set in the planning process; · Reasonable - Set at reasonable levels for the achievement of stated objectives; · Cognitive of the real environment in which they operate - Budgets cannot be set in isolation from the wider operating environment; · Supported - By those implementing them.
It's CELL MEETING once again. Kindly visit www.ceclfonline.org to download the Bible Study Outline. Cell Meeting is a place of transformation... be sure to invite your souls. Have a glorious meeting! #Vision400 #CeAccraGhanaZone
Happening Now! A Special Breakfast treat for all first timers in the month of July in Christ Embassy LoveWorld Arena Accra as they get acquainted with our ministry. More to come.. #CeAccraGhanaZone #Vision400
Celebrating A TESTIMONY OF THE WORD. Happy Birthday David Prince Lawal. Like the dawning of a new day You are worth more than gold can pay A testimony of the Word in action. A trophy of Grace's production. We love you dearly! #DavidPrinceAt1 #DavidPrinceLawal