prepare operational budgets

Q5: Background information for Dress Impress Retail Store. The organisational policy and procedure documents to be supplied directly to the student. BUDGET PLANNING POLICY DRESS IMPRESS RETAIL STORE Introduction The Board of Dress Impress Retail Store is responsible for overseeing the budget of the organisation and for ensuring that the organisation operates within a responsible, sustainable, and profitable financial framework. In line with this responsibility, the Board of Dress Impress Retail Store conducts a budget planning process each year as part of its annual business planning. Purpose This policy is designed to set out the process for compiling, monitoring and reviewing Dress Impress Retail Store's annual budget. Policy The Board of Dress Impress Retail Store conducts a budget planning process each year as part of its annual business planning. The organisation operates under a budget that must be flexible in responding to unforeseen events, including possible reductions in cash flow, based on historical figures and therefore be regularly monitored and reviewed. Authorisation W. White 15 January 2019 Dress Impress Retail Store BUDGET PLANNING PROCEDURES DRESS IMPRESS RETAIL STORE Responsibilities The Board of Dress Impress Retail Store has ultimate responsibility for overseeing the budget of the organisation and for ensuring that the organisation operates within a responsible, sustainable and profitable financial framework. It is the responsibility of the (Finance Manager/Treasurer] to prepare all budgets and review budgets in consultation with the Finance Committee. The Finance Committee consists of: The Board Chair; The Board Treasurer; The CEO; The Finance Manager. Procedures Preparation of the Budget Clarify Budget information In April each year, the (Finance Manager/Treasurer) starts preparing the budget estimates as part of the Business Plan for the financial year. The process includes: considering operational costs; (as discussed with department managers) setting payroll costs; (discussed with Human resources department) estimating income. (discussed with sales team) Estimating expenses based on previous years costs The initial budget estimates are based on the current expenditure projections to end of year, plus Consumer Price Increments for salaries or relevant wage increases, revisions to awards/contracts, and an increase on operating expenses such as power, telephones, etc. The Finance Committee shall be provided with information about how cost increases will be absorbed or will lead to increases in sale prices. The (Finance Manager/Treasurer) will present the draft budget for discussion at a Finance Committee meeting. The Finance Committee may accept the estimates as presented or may request variations, within the context of the Business Plan. A detailed report denoting reasons for decisions should be attached to the draft budget for discussion. Submission, Approval and Distribution: The (Finance Manager/Treasurer) will then revise the draft and present the amended draft budget at the next available Board meeting, usually in April but no later than end of May. Only approved budgets can be used or executed Once adopted by the Board, this becomes the official operating budget for Dress Impress Retail Store for the following financial year, and all Board members and employees must work within the financial limits stated or implied by this document. The budget will be distributed to all departments and department heads after approval. Monitoring and Reviewing the Budget The (Finance Manager/Treasurer) is responsible for monitoring the organisation's expenditure, reviewing the actual and budgeted expenditures, and reporting on the progress of such expenditure. Financial reports will be prepared each month showing the year-to-date expenditure and its variation from the budget estimates and indicating any increases or decreases in funding. If there are any seasonal variances, then the budget should be broken down into seasonal periods. A detailed commentary should be attached to Board reports detailing reasons for variations and recommendations for corrective action should that be required. All unfavourable variances should be investigated. The bookkeeper should email the finance manager and ask for direction as to how to address the variances. The (Finance Manager/Treasurer] will indicate what effect any variations will have on the budget projections and provide this information to the CEO and the Board. The (Finance Manager/Treasurer] will also report on any other financial matters that may be related to the Business Plan Once adopted by the Board, the Amended Budget will become the new operating budget for the remainder of that financial year. Authorisation [Mr. R. Red) 21 March 2019 MR FER The following is an example of an income performance report for Dress Impress Retail Store for the quarter ended 31 March 2020. Q5.1 Complete the Income Performance Report below: Calculate the variance dollar amount. All amounts must be rounded off to the nearest dollar. Calculate the variance %. Percentage values must be rounded off to two decimal places. For each variance, interpret if the variance is favourable or unfavourable. Dress Impress Retail Store Income Performance Report for Quarter Ended 31 March 2020 Budget $ Actual $ Variance $ Variance % 250,000 125,000 125,000 285,000 115,000 170,000 Sales Less COGS Gross profit Less expenses Wages Shop expenses Rent Other costs Advertising Total expenses Net profit 51.000 13,460 24,000 3,450 7,200 99, 110 25,890 54,000 12,000 24,000 2,400 8,200 100,600 69,400 Quality Indicators Actual $ Budget $ Variance $ Variance % 10 3 Number of faulty items returned by customer per 100 sale items Number of complaints from customers per 100 sale transactions 5 2 Q5.2 List 3 possible causes for budget variances. (use 50-100 words in answer). MR FER 05.3 Are the budget objectives consistent with the organisational aims, projects and MR forecasts? (use 20-50 words in answer). FER MR FER 25.4 Based on the Income Performance Report for Dress Impress Retail Store (presented in Q5.1) and the organisations budget objectives presented in Background information for Dress Impress Retail Store Pg18). In your own words, define each of the following and give two examples of each the following: (use 100-150 words in answer). Budgetary milestones achieved Performance indicators . FER Q5.5 Write an email to the management of Dress Impress Retail Store and according to the MR organisational policies, report on the variance analysis you've completed. (Use clear and concise language in your email) Seek assistance on how to address the unfavourable variances in the report 25.4 Based on the Income Performance Report for Dress Impress Retail Store (presented in Q5.1) and the organisations budget objectives presented in Background information for Dress Impress Retail Store Pg18). In your own words, define each of the following and give two examples of each the following: (use 30-100 words in answer). To From Subject Message Q5: Background information for Dress Impress Retail Store. The organisational policy and procedure documents to be supplied directly to the student. BUDGET PLANNING POLICY DRESS IMPRESS RETAIL STORE Introduction The Board of Dress Impress Retail Store is responsible for overseeing the budget of the organisation and for ensuring that the organisation operates within a responsible, sustainable, and profitable financial framework. In line with this responsibility, the Board of Dress Impress Retail Store conducts a budget planning process each year as part of its annual business planning. Purpose This policy is designed to set out the process for compiling, monitoring and reviewing Dress Impress Retail Store's annual budget. Policy The Board of Dress Impress Retail Store conducts a budget planning process each year as part of its annual business planning. The organisation operates under a budget that must be flexible in responding to unforeseen events, including possible reductions in cash flow, based on historical figures and therefore be regularly monitored and reviewed. Authorisation W. White 15 January 2019 Dress Impress Retail Store BUDGET PLANNING PROCEDURES DRESS IMPRESS RETAIL STORE Responsibilities The Board of Dress Impress Retail Store has ultimate responsibility for overseeing the budget of the organisation and for ensuring that the organisation operates within a responsible, sustainable and profitable financial framework. It is the responsibility of the (Finance Manager/Treasurer] to prepare all budgets and review budgets in consultation with the Finance Committee. The Finance Committee consists of: The Board Chair; The Board Treasurer; The CEO; The Finance Manager. Procedures Preparation of the Budget Clarify Budget information In April each year, the (Finance Manager/Treasurer) starts preparing the budget estimates as part of the Business Plan for the financial year. The process includes: considering operational costs; (as discussed with department managers) setting payroll costs; (discussed with Human resources department) estimating income. (discussed with sales team) Estimating expenses based on previous years costs The initial budget estimates are based on the current expenditure projections to end of year, plus Consumer Price Increments for salaries or relevant wage increases, revisions to awards/contracts, and an increase on operating expenses such as power, telephones, etc. The Finance Committee shall be provided with information about how cost increases will be absorbed or will lead to increases in sale prices. The (Finance Manager/Treasurer) will present the draft budget for discussion at a Finance Committee meeting. The Finance Committee may accept the estimates as presented or may request variations, within the context of the Business Plan. A detailed report denoting reasons for decisions should be attached to the draft budget for discussion. Submission, Approval and Distribution: The (Finance Manager/Treasurer) will then revise the draft and present the amended draft budget at the next available Board meeting, usually in April but no later than end of May. Only approved budgets can be used or executed Once adopted by the Board, this becomes the official operating budget for Dress Impress Retail Store for the following financial year, and all Board members and employees must work within the financial limits stated or implied by this document. The budget will be distributed to all departments and department heads after approval. Monitoring and Reviewing the Budget The (Finance Manager/Treasurer) is responsible for monitoring the organisation's expenditure, reviewing the actual and budgeted expenditures, and reporting on the progress of such expenditure. Financial reports will be prepared each month showing the year-to-date expenditure and its variation from the budget estimates and indicating any increases or decreases in funding. If there are any seasonal variances, then the budget should be broken down into seasonal periods. A detailed commentary should be attached to Board reports detailing reasons for variations and recommendations for corrective action should that be required. All unfavourable variances should be investigated. The bookkeeper should email the finance manager and ask for direction as to how to address the variances. The (Finance Manager/Treasurer] will indicate what effect any variations will have on the budget projections and provide this information to the CEO and the Board. The (Finance Manager/Treasurer] will also report on any other financial matters that may be related to the Business Plan Once adopted by the Board, the Amended Budget will become the new operating budget for the remainder of that financial year. Authorisation [Mr. R. Red) 21 March 2019 MR FER The following is an example of an income performance report for Dress Impress Retail Store for the quarter ended 31 March 2020. Q5.1 Complete the Income Performance Report below: Calculate the variance dollar amount. All amounts must be rounded off to the nearest dollar. Calculate the variance %. Percentage values must be rounded off to two decimal places. For each variance, interpret if the variance is favourable or unfavourable. Dress Impress Retail Store Income Performance Report for Quarter Ended 31 March 2020 Budget $ Actual $ Variance $ Variance % 250,000 125,000 125,000 285,000 115,000 170,000 Sales Less COGS Gross profit Less expenses Wages Shop expenses Rent Other costs Advertising Total expenses Net profit 51.000 13,460 24,000 3,450 7,200 99, 110 25,890 54,000 12,000 24,000 2,400 8,200 100,600 69,400 Quality Indicators Actual $ Budget $ Variance $ Variance % 10 3 Number of faulty items returned by customer per 100 sale items Number of complaints from customers per 100 sale transactions 5 2 Q5.2 List 3 possible causes for budget variances. (use 50-100 words in answer). MR FER 05.3 Are the budget objectives consistent with the organisational aims, projects and MR forecasts? (use 20-50 words in answer). FER MR FER 25.4 Based on the Income Performance Report for Dress Impress Retail Store (presented in Q5.1) and the organisations budget objectives presented in Background information for Dress Impress Retail Store Pg18). In your own words, define each of the following and give two examples of each the following: (use 100-150 words in answer). Budgetary milestones achieved Performance indicators . FER Q5.5 Write an email to the management of Dress Impress Retail Store and according to the MR organisational policies, report on the variance analysis you've completed. (Use clear and concise language in your email) Seek assistance on how to address the unfavourable variances in the report 25.4 Based on the Income Performance Report for Dress Impress Retail Store (presented in Q5.1) and the organisations budget objectives presented in Background information for Dress Impress Retail Store Pg18). In your own words, define each of the following and give two examples of each the following: (use 30-100 words in answer). To From Subject Message