1.1 What Are Budgets?
(By Lydia Wanjiru)
They are predictions of future income and expenses and cash flow. They also predict future performance with financial forecasts and projections and with financial models. The process of creating a weekly departmental schedule can be time consuming. It’s difficult to juggle various financial guidelines as well as ensure optimum staffing levels to properly serve guests without a budget. The front office ‘transaction’ is simply the time it takes to check a conference guest in and/ or out of the hotel. A budget is a financial document used to project future income and expenses. The budgeting process may be carried out by individuals or companies to estimate whether the person/ company can continue to operate with its projected income and expenses. A budget may be prepared simply using paper and pen or computer using a spreadsheet program like excel or with a financial application like QuickBooks The process of preparing a monthly budget includes
Listing of all the sources of monthly income
Listing of all required fixed expenses like expenses like mortgage/ rent utilities, phone expenses etc Listing of other possible and variable expenses
Budgets are plans of action for business organizations. Without a budget a business is literally in the dark when it comes to trying to plan expenditure for the business and to match them to sales revenue.
2.0 CASE STUDY
2.1 Here's how budgeting and business planning helped my business grow (By Rachel Obonyo)
Gideon Kasfiner launched First Luggage, a door-to-door luggage collection and delivery service, in 2004. The business now employs nine people and turns over £2 million a year. Here Gideon explains how financial planning has helped him grow his business in a controlled way. What I did
Worked to an annual and monthly timetable
"I start doing my annual budgets three months before the year end. I look at the current year and see whether we are...