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Prepare a short report that describes why costs and budgets need to be controlled. Describe the results if such problems are left unmonitored and unresolved.

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Introduction

´╗┐Unit 2: Exploring Business Activity Assignment 2 M2 Prepare a short report that describes why costs and budgets need to be controlled. Describe the results if such problems are left unmonitored and unresolved. To: Viren Amin Date: 5th November 2009 From: Reference: BTEC Group B Subject: Why costs and budgets need to be controlled Introduction: In this report I will be explaining why costs and budgets need to be controlled and describing the results if such problems were to be left unmonitored and unresolved. Findings/ Main Body: It is vitally important in all businesses that costs and budgets are controlled, without a strong monitor of these two aspects a business can go bust very quickly. ...read more.

Middle

Some of the many reasons of controlling costs and budgets include not getting into debt. If you aren?t keeping a close eye on what you are spending out on resources and services then you could find your company in a spiral of debt very quickly. This is one result of unmonitored costs and budgeting, it can be hard to resolve once you are in debt as you have large payments increasing the longer you stay in debt. Another result of an unmonitored financial system of costs and budgets is not only debt, which was previously mentioned, but a bad credit report which prevents your company from lending from banks and won?t allow you the money to invest in development in your business. ...read more.

Conclusion

The business value will eventually decrease significantly as a result of an unmonitored financial system not checking the costs and budgets effectively. Conclusions: In conclusion it is vitally important that every business monitors their costs and budgets as the effects of an unmonitored and unresolved financial system will eventually undermine the whole foundation of a business. This could be by either debt, a bad credit rating, loss of staff and loss of assets. Recommendation: My recommendation to anyone who owns a business is that you make sure from the very start that you have a clear business plan and list all of the expenses and try to make a rough estimate on how much profit you will make on a product or certain service so that you avoid losses. Terms of reference: Lectures, http://www.debtreducers.co.uk/debt-consolidation.asp, http://en.wikipedia.org/wiki/Credit_report Unit 2: Exploring Business Activity Assignment 2 M2 ...read more.

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