Master Budget For YouFood Limited – Sales, Expenses, And Profit

Audience

In the content of the report, a master budget for the YouFood Limited is drafted. In the contents of the master budgets, the targeted sales of the company are also drafted based on the assessment of the market.

Audience:

The budget is prepared for the CEO, production manager, Sales manager, and sales teams.

Master Budgets:

The presented master budget will elaborate the various projected cost of the organization and the will identify a proposed profit structure. The master budget will hold the sales and other expenses of the business for the current financial year (Maskell et al. 2016). In addition to that, if the audience has any queries then ask for clarifications. From the following questionnaires

• The contents are not relevant
• There is an inadequacy in the statement
• The sources and assumptions of the amounts

Budget:

Organisational Requirement:

From the organisation financial procedure, it is identified and understood that the

1. The company makes all the sales in cash.
2.  In addition to that as the company is engaged in the food industry, it requires fulfilling some safety and other regulations that make the cost of the company a bit higher.
3. Another financial indicator for the company is the cost of delivery as this is a B2C business model business (Barr and McClellan 2018).
4. The cost or warehouse and the kitchen of the company are payable at the end of12-month.
5. The accounts of the company are prepared on the applicable accounting standards and the taxation will be withheld under the provisions of their ITAA 1997.

Summary of the activities.

As there all the sale of the company is made in cash or banking transaction, therefore, no available debtors are presented in the current moment. In addition to that, the current payment policies to the creditor or the suppliers of the YouFood are paid for 4 weeks (Drever et al. 2015).

Secondly, the current atmosphere of the company is not located a particular of, rather it is delivering the foods that are placed online direct from the kitchen to the customers place therefore the cost of transportation is very high.

Further, the company does not have its own premises, therefore; the company has acquired a rented place for warehousing and for essential cooking of the orders. The financial accounting and the management accounting are prepared in accordance with the requirements of the company (Rogulenko et al. 2016).

Changes in the plan:

If there are requirements for any change in the budget or the accounting policy then at first, the problematic areas are to be identified and the modification will be made after finding all the information if there are many flows in the budget then it should be redrafted. It may take up to 10 days (Crutzen et al. 2017). In this period, a contingency plan also will be drafted.

1. Aspects of basis accounting Principal:

For the preparation and presentation of the various accounting transaction, some inherent accounting principles are required to be followed. The basic accounting principles are described hereunder:

• Economic entity assumption:this assumption segregates the business owner from its business. In accounting, the owner and the business are separate entities. This legalises the existence of the business a separate legal entity as a distinct person (Miller 2018).
• Going Concern Principal: the going concern principal assumes that the business will exist for a long period that means that the business is not going to stop the business in the near future.
• Accrual basis of accounting: in the accrual basis of accounting the business transaction is recorded on the accrual basis, there are two types of permissible accoutring recording techniques cash basis and accrual basis. In cash basis, the accounting transactions are recorded only when the cash transaction is received or paid (Alviniussen and Jankensgard 2015). This technic is followed by small entities. The general principal states that the accounting is to be done on the accrual method of transaction, where the actual transaction is more important than the cash possession of the transaction. The accounts are to be dealt at the transaction date irrespective of the cash received of payments.

1. As per the ATO’s requirements, all the transactions or the information are to be reported to the Australian taxation office are as follows:

• Cash book
• Assets for CGT purpose
• Financial statements
• Others

1. Financial record keeping:

The financial record keeping means the preparation and presentation of the financial transactions, the financial transaction is to be documented in the prescribed sequenced orders rather it can be said the financial documents are the representations of the transaction of the business, individual and others (Smith et al. 2015). The financial documents are to be recorded in accordance with the accounting principal and accounting standards. Further, the type of the business will vary the presentation of the financial documents. In addition to that, the financial, the recording will be based on the nature and activities of the business.  

• Financial Auditing:

Master Budgets

The auditing is processes that describe and comment on the viability of the financial statements whether they are true or not. The true effect will commence when the accounts are prepared based on appropriate AAS. In addition to that, the auditing process will be conducted based on auditing standards. The auditing is required to determine the accuracy of the accounting and the discloser requirement for the preparation of the financial stamens are adequate or not (Rubin 2016).

• Budgeting technical:

Budgeting is the process that created a pre-plan for the collection and spending of money. The collection plan and sending plan is regarded as budgets. Concisely it can be said budgeting is the process where the management predetermines the process all collection of the funds from various sources like making sales of goods or service or getting cash inflows from other sources. Moreover, the budget empowers more important for its spending. As the income is not relatively assessable but a proper expenditure, planning can be developed based on the knowledge (Kireeva 2016). There are many types of budgets like sales budges, purchase budgets and others. There is another type of budget that is called “Master Budget” that refers to the collection of the funds and making the expenditure. This envelopes the proper costing and cash reformation structure of an entity.

For a successful budgeting, the following points are to be considered:

• Understand the organizational needs
• Assess the markets
• Get the information related to the budget from reliable sources.
• Redefine the sources that are contributory and adequate or not.
• Define the costs

Performance Activity:

Introduction: In the contents of the report, the various observation of the accounting techniques and the information of the business activities are identified. The reliable assertion and modification of the budgets are made with the assertions of the regulation. In addition to that, a contingency plan is developed for the modification and the budget (Réka et al. 2014).

Observation:

In the practical observation, it is ascertained that a large portion of the perishable products are wasted daily and the company has nor regulated any provisions for that. Further, in the proposed budget the fuel costs are not adequate it is approximately 15% higher because of the increased price (Suomalainen et al. 2015).  Another observation located in the study of the accounts is that the sales for the last quarter will be affected due to the current market slow down. Instead of the above, the company has to arrange for the preparation o and presentation of the record as per the instruction of the ATO. Further, it is observed that there are some flaws in the accounting of the inventory and stocktaking. The cost of administrative and security are lower.

Organisational Requirement

Solution:

For the above-identified problems that company has to make suitable arrangement for the redrafting, the budges as they are some significant and important required changes are to be dealt. Further for the reporting propose to the Australia Taxation Office (Kireeva 2016). A contingency plan is drafted for the changes in ten marketing behaviour and the increase i9n the cost as this will affect the profitability of the YOU FOOD. The contingency plan will consist the technic to increase the sales in the slowdown in the Q 2 and Q 3.

Implementation:

The above-stated plans are implemented in the commencement of the quarter 2. For the slowdown in the quarter 2 and quarter 3, the company initiated provisional discounts options and promoted the business offerings. In addition to that, a major portion of the of the advertisement cost is allocated for this slow down period to boost the sales.

Monitoring:

Next step after the implication is monitoring and controlling the business activities that are implemented so that the contingency plan works well. The monitoring is required for controlling the changes in the performance.

Conclusion:

In the reported contents, the business activities that are identified for the appropriate changes are ascertained and make a suitable adjustment in accordance with the required legislation and the changes are initiated in accordance with the contingency planning. This report develops an utmost idea of the organizational goals and requirements. All the adjustment are made for the betterment of the proposed master budget. The implosion of the accounting and the reporting are made in accordance with the accounting standards. Further, all practicing activities often contingency plan is monitored and controlled.

References

Alviniussen, A. and Jankensgard, H., 2015. Enterprise risk budgeting: bringing risk management into the financial planning process.

Barr, M.J. and McClellan, G.S., 2018. Budgets and financial management in higher education. John Wiley & Sons.

Crutzen, N., Zvezdov, D. and Schaltegger, S., 2017. Sustainability and management control. Exploring and theorizing control patterns in large European firms. Journal of cleaner production, 143, pp.1291-1301.

Drever, A.I., Odders?White, E., Kalish, C.W., Else?Quest, N.M., Hoagland, E.M. and Nelms, E.N., 2015. Foundations of financial well?being: Insights into the role of executive function, financial socialization, and experience?based learning in childhood and youth. Journal of Consumer Affairs, 49(1), pp.13-38.

Kireeva, E.V., 2016. Effective management of personal finance. ??????????? ????????? ???????? ????? ? ??????????, (5-7), pp.5-7.

Maskell, B.H., Baggaley, B. and Grasso, L., 2016. Practical lean accounting: a proven system for measuring and managing the lean enterprise. Productivity Press.

Miller, G., 2018. Performance based budgeting. Routledge.

Réka, C.I., ?tefan, P. and Daniel, C.V., 2014. TRADITIONAL BUDGETING VERSUS BEYOND BUDGETING: A LITERATURE REVIEW. Annals of the University of Oradea, Economic Science Series, 23(1).

Rogulenko, T., Ponomareva, S., Bodiaco, A., Mironenko, V. and Zelenov, V., 2016. Budgeting-Based Organization of Internal Control. International Journal of Environmental and Science Education, 11(11), pp.4104-4117.

Rubin, I.S., 2016. The politics of public budgeting: Getting and spending, borrowing and balancing. CQ Press.

Smith, T.E., Richards, K.V., Shelton, V.M. and Malespin, T.S., 2015. Sirens’ call: Understanding poor financial decision making and credit card misuse. Journal of Human Behavior in the Social Environment, 25(8), pp.897-906.

Suomalainen, T., Kuusela, R. and Tihinen, M., 2015. Continuous planning: an important aspect of agile and lean development. International Journal of Agile Systems and Management, 8(2), pp.132-162.

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