Aireen Y. Clores

Aireen Y. Clores

Meeting the Budget: Creatively controlling event costs.

Controlling is monitoring the performance of systems and resources.

Control is a management function which whether what is supposed to happen is happening or is going to happen.

Aireen Y. Clores

1. Plan what you intend to do2. Measure what has been done3. Compare achievements with the

blueprint4. Take action to correct anything that is

not as it should be.

Aireen Y. Clores

COST & CONTROL Control is the total

spent to deliver the goods

Control1. Power to direct or

determine the events.

2. Verify by comparing to a standard.

COST CONTROL

Any action taken within the management cycle which enhances the likelihood that established goals and objectives will be achieved.

BASIS OF CONTROL:

Recognize possible deviations from the baseline and to respond in an effective way.

The event manager must also consider the trade-off between cost, time and quality.

BASIS OF CONTROL:

The event manager must also consider the trade-off between cost, time and quality.

The event management must realized the importance of keeping to the budget, and must always evaluate the often competing aims of creativity and cost.

Bookkeeping is the record keeping aspect of accounting. Each financial event or transaction has to be entered.

The transactions entered during the bookkeeping process usually fit into one of the six following classifications.

Customers – who buy products and services sold by the business

Employees – who are paid wages and provided benefits

Vendors – who sell services, equipment and supplies to the business

Government agencies – who collect taxes from the business

Sources of equity capital – investors or owners who put money in and take it out of the business

Sources of debt capital – banks and lending institutions

There are two standard reports which are the main sources of business financial information: the balance sheet the profit and loss statement

1. Purpose is to show what a company owns and owes on a specific date

1. Provides this information by laying out the value of the assets and the liabilities of the business

The assets of a company are anything that the business owns. (cash on hand, office equipment, vehicles, tools, real estate, buildings)

Accounts receivable is money which is owed to a business.

The liabilities of a business are anything the business owes to others.

SERVICE INCOME

With service income , the profit can be determined simply by deducting expenses associated with performing the service.

Service income is derived from performing a service while

SALES INCOME

With sales income, inventory costs also must be taken into consideration. This inventory cost is referred to as the cost of goods sold.

sales income is derived from selling a product of some type.

Budgets provide the baseline of expected performance against which manager’s measure actual performance

A budget is much more than slap-dashing together a few figures.

A budget is an integrated financial plan put down on paper, or entered in computer spreadsheets.

Planning is the key characteristic of budgeting.

The budget is arguably the most important element of the event planning process.

A budget is simply a statement of projected spending that is compiled to act as a guide and yardstick against actual costs.

A good budget will therefore display both projected and actual expenses as well as highlight any variance between the two, along with a full description to account for these differences.

Budget Planning

The Budgeting Process

Depending on the size of your organization, the budgeting process might be quite simple or alternatively quite complex. Regardless of the size of the organization, you can budget almost anything in it.

Labor budget: A labor budget is made up of the number and name of all the various positions in a company, along with the salary or wages budgeted for each position.

Sales budget: The sales budget is an estimate of the total number of products or services that will be sold in a given period. Total revenues are determined by multiplying the number of units by the price per unit.

Production Budget :

The production budget takes the sales budget and its estimate of quantities of units to be sold and translates these figures into the cost of labor, materials and other expenses required to produce them.

Expense budget:

Expense budgets contain all the different expenses that a department may incur during the normal course of operations. You budget travel, training, office supplied and more as expenses.

Capital budget: this is the manager’s plan to acquire fixed assets such as furniture, computers, and office space, to support the operations of a business.

One Year at a Time: a company generally prepares budgets one year at a time. While a company may do long-term strategic planning to develop five- year strategies, trying to forecast further down the road than 12 months for budgeting purposes is very iffy.

Developing a detailed financial plan for the period coming up helps establish financial objectives and identifies exactly what must be done to meet these objectives.

Budgeting also encourages a business to articulate its vision, strategy and goals.

Budgeting imposes discipline and deadlines on the planning process.

Budgets can serve as benchmarks against which to measure actual performance for a business.

Budgeting forces managers to do better forecasting

Budgeting motivates managers and employees by providing useful yardsticks for evaluating performance and for setting compensation when goals are achieved.

Meet with staff Gather data Apply your judgment Run the numbers Recheck results and if

necessary, run the budget again

Clos

ely

revi

ew y

our b

udge

ting

docu

men

ts a

nd in

stru

ctio

ns