2016 budget orientation

Orientation

Which is correct?

A. A PLAN IS A BUDGET

B. A BUDGET IS A PLAN

C. A PLAN & BUDGET IS SAME

A written document that describes in detail how a business or new business is going to achieve its goals. A business plan will lay out a written plan from a marketing, financial and operational viewpoint.

BUSINESS PLAN

The idea behind putting together a business plan is to enable decision makers to have a more defined picture of potential costs and drawbacks to certain business decisions and to help them modify accordingly before implementing these ideas.

Purpose

I n L uke 14:28-29, J esus counseled, "F or which one of you, desiring to build a tower, does not first sit down and count the cost whether he has enough to complete it? Otherwise, when he has laid a foundation, and is not able to finish, all who see it begin to mock him."

BIBLE VERSE

The study showed that companies with written business plans increased their revenues 69% faster over a five year period than those without plans.

- Journal of Accountancy

SURVEY

Part is Budgeting

Budget Benefits

Top 10 Benefits of Budgeting 1. Gives you control over your money. 2. Keeps you focused on your money goals. 3. Makes you aware what is going on with your money. 4 Helps you organize your spending and . 5. Makes you decide in advance how your money will work for you. 6. Enables you to save for expected and unexpected costs. 7 Enables you to communicate with management. 8. Provides you with an early warning for potential problems. 9. Helps you plan to pay loans. 10. Enables you to save cost.

WHAT DO WE BUDGET?

BUDGET MONITORING

SPENDING METER BUDGET/FUNDING METER

A budget is nothing more than a written estimate of how an organization — or a particular project, department, or business unit — will perform financially

BUDGET DEFINITION

HIERARCHY OF PLANNING

MISSION

FORECAST

STRATEGIC PLANNING

ALIGNED CORE FUNCTIONS

ANNUAL BUDGET

PRIORITY DELIVERABLES

INDIVIDUAL ACTIVITY 1

“My Personal Vision & Mission”

Sample Personal Vision

“I will become a well-known and respected leader in the food industry revitalizing the ways food is produced and marketed making healthier products to help people live better lives.”

Sample Personal Mission

“To be a teacher. And to be known for inspiring my students to be more than they thought they could be."

HIERARCHY OF PLANNING

MISSION

FORECAST

STRATEGIC PLANNING

ALIGNED CORE FUNCTIONS

ANNUAL BUDGET

PRIORITY DELIVERABLES

DELIVERABLES

OF ALL KEY DELIVERABLES ONE WILL STAND ABOVE THE REST – PRIORITY DELIVERABLES

BUDGET ALLOCATION

PRIORITY DELIVERABLES DESERVES A HIGHER:

DELIVERABLES

PART OF THE PLAN

INDIVIDUAL ACTIVITY 2

“My Short & Long Term Plan”

BALOONED BUDGET DEFICIT WILL CALL FOR A DRASTIC BUDGET CUTS

BUDGET IS A EFFECTIVE INTERNAL CONTROL SYSTEM

BUDGET AS A CONTROL MECHANISM

BAD SPENDING

SIMPLE FORMULA FOR BANKRUPTCY

BUDGET LIMITATION

NO ADVANCE FORECASTING TOOLS AND PROGRAM CAN SEE WHAT THE FUTURE LIES BEHIND

WHEN SALES FORECAST / PROJECT ESTIMATES FAILS

OUR BUDGET STRATEGY

PROFIT DRIVEN RESPONSIBILITY CENTRES

COST

The gist of 20th century thinking management control is expressed by the mantra: let the managers manage; make the managers manage.

MANAGERS AS COST/PROFIT CENTER MANAGERS

RESOURCES

MANAGER’S TOOL

MANAGER

Describe the Bottom-Up Approach to Budgeting

TopManagement

Manager ManagerManager

Each manager prepares a budget request, from which management creates an overall budget.

Performance-based budgeting is the practice of developing budgets based on the relationship between program funding levels and expected results from that program. The performance-based budgeting process is a tool that program administrators can use to manage more cost-efficient and effective budgeting outlays.

TARGET GOAL

BUDGET FUND

GOAL VS BUDGET

UNDER-ACHIEVED BUDGET (SAVINGS) DOES NOT MEAN FAVORABLE BUDGET OR OVER-ACHIEVED BUDGET (DEFICIENCY) DOES NOT MEAN UNFAVORABLE BUDGET BUT WHAT IS IMPORTANT IF THE SET GOAL IS ACHIEVED WITHIN ALLOCATED BUDGET.

INTERPRETATION

GROUP ACTIVITY

“Plan & Budget Implementation”