Case Study: Managing Budgets

Paper Summary:

This paper explains how a company with $500,000 budget can meet its financial goals, management goals and supplier's goals.
The paper outlines the steps that must be taken in order to manage this budget and meet its intended goals, focusing on formulating a preliminary budget estimate, cooperation and coordination with vendors, and cash flow management. The paper lists a summary of the goals to be achieved by managing the budget and includes a chart of an example of a 90 day cash budget

Table of Contents:
Summary
Managing Budgets
Converting to a New System
Management and Vendors
Cash Flow Management
Presentation to the Management

From the Paper:

"For a company that has a budget goal of say around $500,000 it needs to first formulate a preliminary budget estimate that would help identify the disbursement of lump sum amount such as payments to creditors, payment to suppliers, taxes, payroll, advertising costs, interest and operating expenses. These will give a rough estimate of the overheads and the fixed costs. Secondly, it needs to evaluate its cash flow elements such as collections on accounts receivables, cash from sales, payments of accounts payable, cash expenses, dividend (if any) and payments of long term debts."

Sample of Sources Used:

• Author not available, "Prepare a Cash Budget" VA-Interactive.com, Accessed on 7-4-2005 from: http://www.va-interactive.com/inbusiness/editorial/finance/ibt/cash_bud.html
• Author not available, "Budgeting in a Small Business", Women's Business Center, Accessed on 7-4-2005 from: http://www.onlinewbc.gov/docs/finance/budget1.html#summary
• Benoliel, Ian. "5 Common Budgeting Mistakes: Avoid these errors to avoid financial nightmares". Entrepreneur.com, February 25, 2002 Available at: http://www.entrepreneur.com/article/0,4621,297437,00.html
• Atrill, Peter and Eddie McLaney, Accounting and Finance for Non-Specialists, Prentice Hall 1997.
• Bernstein, Leopold and John Wild, Analysis of Financial Statements, McGraw-Hill 2000.

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