2 when you process information why do you feel it is

What are the steps to establishing a quality monitoring system?
2. When you process information, why do you feel it is important to note
the time, acceptable performance limits, changes to measurements, and
whether the quality level was correct?

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3.2 – Analyse and interpret budget and actual financial information
to monitor and review profit and productivity performance
A budget is a financial document that is used to project future income and
expenses. External factors, such as the state of the economy, changes to
legislative requirements and technological innovation can have an impact on
how much of the budget is available. As an ongoing document, it is important
to continuously scan the market to ensure that you are still working within the
budget.
For example, if there is a change in the economy whereby spending decreases,
then depending on your product and/or service, you may find that your
customers no longer purchase your product. This downturn in spending shall be
reflected in your allocated budget. If there is a decrease in the demand for your
product, then you will no longer need to supply as many, thus your budget will
usually shrink to reflect that budget.
Financial information found in financial reports such as the Profit and Loss
statements will demonstrate when there is a decrease in profits, thus a
decrease in sales. However, do not lose sight of the fact that a decrease in
profits may correlate with an increase in theft.
Depending on the size and function of your organisation, the financial
information that you keep will vary. However, financial information that you may
need to monitor could include:
f Budgets
f Ratio analysis
f Budget forecasts
f Cash flow statements
f Profit and loss statement
f Balance sheets
f Investment and liability reports
When reviewing financial information, as with any over sort of reviewing, it
is important to identify the variations in the reports and then try to identify
the causes of these variations. It is only when you identify the causes of the
variations that you will be able to identify how to correct the variations.

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BSB51915 DIPLOMA OF LEADERSHIP AND MANAGEMENT | OPERATIONAL PLANNING_V2.4
Activity 3.2
Individually or in pairs, complete the following:
Why is it important to note variations in budgets?

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3.3 – Identify areas of underperformance, recommend solutions,
and take prompt action to rectify the situation
To operate within your budget, to meet the targets and goals set out in your
operational and strategic plans, you must monitor and review performance. This
is the key to your success. If you work outside your budget, for instance, then the
organisations profits will be affected.