Therefore, the increase of "other expenditures" is understandable.
Task 2 1. Given the suggested changes in the operation for the 2018/2019 as set out in Task 2, discuss which departments you will need to liaise with in terms of financial and HR impacts. Which details will you need to discuss for a successful implementation of the budget? A. When comparing actual results to the budget, each line should be analysed separately. Any significant variance should be looked into - generally a threshold will apply, below which analysis is not required e.g. Find out whether a threshold applies at your workplace. If so, what is it? We should consider very small and very large budget items. For very large budget items, such as Accommodation Revenue, you can imagine that 5% variance can be quite significant. If Hotel's Accommodation Revenue was down by 5%, that would equate to about $35,000 a month. The Front Office Manager would have some explaining to do! Alternatively, Fees and Charges Expense may have a monthly budget of $100, where even a 100% variance would still not be a large sum of money. For these reasons the percentage method can be difficult to use. Another alternative is to have a $ figure which is an acceptable level of variance. B. To successfully manage a budget, the actual trading results should be compared to the budget on a monthly basis. Revenue can be compared more frequently i.e. daily or weekly, but expenses can usually only be compared at the end of the month as all invoices from suppliers may not be entered before that time. It is unlikely that all items would be exactly on budget or within the threshold, so it will be necessary to undertake further investigation on many items. For items with significant variance, a General Ledger printout should be produced and a visual check made to ensure that items have been coded to the correct General Ledger code. You should also check that no invoices have been entered more than once (if a reconciliation of supplier statements is completed regularly, this should not occur).
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- Spring '20