Week 2 Discussion Questions DQ#1: How do you define strategic planning? What are some differences between strategic and financial planning? What financial problems might an organization encounter when implementing a strategic plan? I believe strategic planning is the process, which takes place to set organizational goals to meet the expectations of the mission and direction of the organization. Strategic planning focuses on the long-term goals of an organization, therefore it differs from financial planning.
However, certain factors require public administrators to update or adjust allocated monies for the fiscal year. This is called rebudgeting. In this article, authors John Forrester and Daniel Mullins give a better understanding of this process. They also address the reasons why municipal governments use it. Re-budgeting tends to focus on small-scale issues; more of a tweaking of the original budget.
(Tatum, 2012) There are numerous reasons that a budget is important. One reason would be setting the long and short term goals for a business to follow. The budget in this circumstance is a document that serves
TASK 1D By looking at the cash flow forecast for the year, you can see that from January through to July (6 months) you will have a negative bank balance at the end of each month. You need to think about how you can counteract this by making appropriate decisions now. You could try to negotiate longer credit terms for the radio advert and insurance company. Spreading these amounts over a longer time period would reduce the amount you will be overdrawn by each month. Think about ways to promote your business to encourage more customers to use your services, this will increase your income during these months.
Initially, for at least the first few months, there will be a lag between what we have available and what the customers or clients know we stock. This could cause decreased inquiries or sales of the specific new models until updated marketing materials are distributed and the website is updated. Another potential risk is the longevity, or “shelf-life” of both the pediatric and bariatric models. We expect there to be increased “wear and tear” for both models, which could reduce the rentable time by 5-10 weeks, decreasing the profit for the rental models. Lastly, increased inventory requires more space.
Creating a budget will allow Guillermo to know the exact amount of money that he has to allocate to specific expenses. “Performance reports provide feedback by comparing results with plans and by highlighting variances, which are deviations from plans.” (Horngren at el. 2008, p. 13) Guillermo can use performance reports to determine if changes that he makes positively or negatively affect his bottom line. By using both budgets and performance reports Guillermo should be able to outline a plan that will balance company/organizational goals, personal goals, and maintain profitability. Ethics Influence Regulations and standards such as Generally Accepted Accounting Principles (GAAP), Foreign Corrupt
BSBFIM501A - Manage budgets and financial plans Written / Oral Questions 1. Why do organisations need accurate and timely financial information? What information is required to manage the organisation’s finances? Who is usually responsible for an organisation’s financial management? -Financial management ensures that a business is monitoring their finances.
“Ponemon Research puts the cost of compliance at $3.5 million for the 46 businesses they studied.” (ShredNation, 2012) As the quote states, adhering to compliance including implementing external and internal auditors is expensive. Although the costs may be high, non-compliance can be just as costly in a negative way to the organization. Non-compliance can cause loss of positive reputation, loss of investors and shareholders, loss of customers, decreases in stock prices, lack of revenue, state and federal regulation fines, corporate scandals, financial bailouts, and last failure and closure of the organization. These risks are all costly to an organization and can cause ultimate failure. Adhering to compliance is crucial to prevent companies from failing and taking huge financial loses.
It is very important to involve the SMEs in the cost planning also to get the accurate estimate for the cost. After the budget is planned it is critical to monitor and control the project’s cost. Earned value analysis helps monitoring the project cost. Monitoring the project cost against the actual cost provides the project manager how to handle the rest of the project. The sooner the issues have been caught the sooner it has been taken care.
Minimum wage represents a government involvement in a nation economy, although businesses are often wary about the prospect of the government making major economic decisions. In the U.S., Congress sets a federal minimum wage that businesses must follow. Individual states can also create separate minimum wage laws above the federal law. Intervention from the federal and state government can create a difficult business environment. Governments may choose to increase minimum wage on an arbitrary basis, making it difficult for companies to hire individuals at a consistent market rate.