• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Budgeting. By setting up a budget it will allow me to see the where I am spending my money and allows me to control spending in certain areas.

Extracts from this document...

Introduction

Budget: A budget is a financial plan that helps businesses to see how much money is going to be spent of things such as expenses and fixed costs. By setting up a budget it will allow me to see the where I am spending my money and allows me to control spending in certain areas for examples if I am spending too much on equipment's, the budget will highlight it an I can therefore buy a cheaper one or not buy it at all. There are two types of budget, the trading budget and the capital budget. The trading budgets is a budget plan that shows that amount which is going to be spent on the day to day running costs for example raw materials and bills. The capital budget shows the amount of money which is to be spent on large equipment's such as the fixed costs for example equipment and rent. My capital budget includes the equipment that will be used when making and serving the products for example the oven and drinks dispenser. I will only buy these equipment's once as it is very expensive and I wouldn't be able to afford it if I keep buying it again. ...read more.

Middle

By ordering at the beginning of the month, the ingredients will be fresh as it will be bought recently from the suppliers. However, this could cause problems because if I get more sales than anticipated, than I would be required to order more stock which could cause problems for example if there is a delay in delivery then I won't be able to offer the products to customers which will ultimately result to dissatisfied customers. A situation I could carry out to overcome this situation is to order stock whenever needed. By doing this, I will always have the sufficient amount of stock needed as well as having enough storage space to store them. Apart of the raw materials, I have decided to buy the non edible products such as tissues, packaging and serviettes on a 3-4 month basis. I have chosen to do this because one, they don't take up much storage space and two, because they don't get ruined over time. By doing this, it saves me time having to order it every month and it also saves me money having to pay for shipping if I were to order them every month. ...read more.

Conclusion

Another disadvantage is that it doesn't take into consideration any external factors for example, there could be a change in price for example my suppliers may increase the price of the pizza packaging and as a result of this, it will lead to me creating another budget which will ultimately waste time. By creating the budget, it has helped me to meet my aims and objectives for the reason that it will control my spending and by controlling spending, therefore it will help me to meet my objectives of cutting down costs and will therefore, lead my business to a greater profit. As well as this, it will help me to stay within my budget and as a result, will lead to greater profit as well. Apart from my profit aim, my budget will help me to increase sales because it will motivate my staff to work harder as they are given a task to do with a set amount of budget. Lastly, if I notice I am overspending, I will look for cheaper suppliers for example if I can't find cheaper equipments from a different website/store then I will purchase it from there and therefore will allow me to fulfil my objectives of finding suppliers and as a result will increase me profit. ?? ?? ?? ?? ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Accounting & Financial Management section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Accounting & Financial Management essays

  1. A2 Business CourseWork

    It is important to balance this correctly to ensure you achieve maximum overall profit. The prices are generally set by a business or its competitors which the business will have to try and match. * Competition: Entering an already exiting profitable market may sound appealing; however you have to bear in mind the existing completion.

  2. The maintenance of accurate records supplies the company with the financial data that assists ...

    * Consistency concept: a business should maintain the same accounting method during each trading period. For example, when a business decides to provide for depreciation on vehicles by 20% using the reducing-balance method it should carry on using this method and percentage in future annual accounts for vehicles.

  1. The purpose of this paper is to analyze the decision of pursuing an MBA ...

    I was working till 2009 but I wanted to do an MBA. Currently my salary is $36,000 per annum and if I join MBA after two years I am expecting to get a salary of $60,000 per year. This is an increase in salary of about $24,000 per year.

  2. Business Development Plan

    so that they don't have to be trained and everything does not have to be explained in detail. This should be cost effective as the employees will fill their roles within the business and effectively improving the quality of the human resources as people with good qualifications along with a good experience in the field will needed to be picked.

  1. business plan unit

    * Timed: is the time limit you have set to complete a task/objective by. An objective must have a time limit in order to be legitimate. An example of this is, the business needs to have paid off the loan that was consumed in order to start the business within 2 years.

  2. Income increased To Budget

    Provision of Appropriate Reserves to Address Emergencies/Crisis Businesses have to make sure that they keep some money back at the end of each month in case an emergency should happen. This ensures that if they do have problems, such as an unexpected expense, or there is a downturn in the market they have enough funds to continue in business.

  1. The company I'm reporting on is Kraft Foods Incorporated - accounting principles.

    Why is this number important? Well, a company can have millions and millions of dollars worth of sales but still not make a profit. If a company's gross profit margin is a healthy number, this indicates sales dollars are being turned into profit. Analysts sometimes refer to gross profit margin simply as gross margin.

  2. Illustrate the use of budget control in my chosen organisation which is Tesco.

    Despite “Powerful economic headwinds” Tesco made a 10% increase in the first half of sales which made Tesco’s £1.45billion this year, also with UK like-for-like sales increasing by 4% which was excluding fuel during the second quarter.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work