Overview
In developing a schedule and a budget, there are different important tools that are essential in ensuring that there is effectiveness. To have a budget that meets the predetermined objectives, it is important to have a baseline operation strategy that would ensure that there are no deficiencies in either during the schedule and budget development or after. There are a number of tools that can be employed in developing a schedule and a budget. Some of the tools that will be used in this case include revenue projection tool, capital budgeting tool, cash flow forecast and profit and loss projection tool.
Revenue projection tool
It is a tool that is very essential for schedule and budget development. It can be used to give a determination concerning different sources of income coming into the company or enterprise. Under this tool, all the various avenues through which income is realized are analyzed to determine if the projections for budgeting are up to the required standards. Under normal circumstances, it is crucial for a business to come with a budget based on the amount of revenue coming into the business entity. It is not possible for budgeting to be done when there is no liquidation. Therefore, the individual revenue sources are to be analyzed and evaluated based how much can be realized. Important notification is that through the determination of various sources of revenue, it helps in scheduling for events related to the wellbeing of the business as appropriate. Budgeting is effective when there is proper knowledge concerning all the avenues through which income into the company is realized (Valenti, 2003). The tool will be crucial in developing a schedule and a budget.
Capital budgeting tool
Under capital budgeting, the most important issue to consider is how much money is needed for a particular project. For instance, if there is a need to invest in new equipment or come up with new products, it is critical to the value estimates of what the in initiatives will cost. This tool is intrinsic in the sense that it can be used to give a determination how much resources can be yielded from a given project. Without this tool, it becomes difficult to outline how much is needed for a particular project to ensure that success is achieved. It can be noted that this tool can help in doing different things such as determining the index of profits, rate of returns and the period that some capital elements need to be paid back. The tool is of critical importance to schedule and budget development because it is through this that one is able to know the amount of resources needed for a particular project (McPhee, 2008).
Cash flow forecasting
The intrinsic nature of this tool cannot be over emphasized. Case in point is that to be able to know how much an enterprise would be profitable in a given season, knowing the amount of resources that come into the system would be of critical importance (Rotondi, 2000). The tool also helps in knowing the debt levels so that it becomes possible to correctly know how much the company would pay back and the amount the company would retain as profitable. The cash flow forecasting tool can be used for short term and long basis. For instance, the tool can be used to determine how much can be realized over a short period of time and what can be achieved on a long-term basis. When the tool is employed as necessary, it becomes easier for the company to forecast ahead of time in terms of coming up with the right packages based on the projected cash flow. In the event that the cash flow suggests a decline in the amount of revenue brought into the enterprise, it becomes possible to for budget readjustments. It also makes it possible for scheduling of other projects based on how much the revenues will be realized. Cash flow forecasting is an important tool that would ordinarily help any given company to organize itself appropriately to ensure that the projects to be initiated are in line with the cash flow projections of the company.
Profit and loss projection tool
Profit and loss in business are an inevitable phenomenon that sometimes may not be easy to avoid. In schedule and budget, it is critical to know how much an enterprise will realize over a given period of time in terms of profits and losses. When there are projections, it becomes possible for a company to know how much profit will be made in a given season and loses that are expected. It is then that it becomes possible to make adjustments based on the expected results. Profit and loss projection helps a great deal in assisting the company, whether to cut spending or how to minimize the loss. In the event that there is not a correct determination in profits and losses, it becomes possible for the company to make some mistakes in terms of deciding on what initiatives to undertake.
Monitoring and controlling of the schedule and budget
There are a number of tools that can be used to ensure monitoring and control of the schedule and budget. One of the tools that can be used in monitoring and control is cost tracking (Taylor, 2008). In this case, all the records that relate to the cost are kept to ensure that all the records concerning spending are put into perspective. Based on the results that are realized, there can be a review of the records to determine the areas that need to be readjusted to ensure that there is conformity. Without tracking the cost, there can be know tracking and monitoring as there would be no toll used for evaluation. Cost reporting is another tool that would be important in ensuring that there is monitoring and control of the budget. Cost reporting is where information concerning spending in every area within the business set up is documented. From time to time the toll acts as a reference point over which adjustments are made. The reported information helps in the monitoring of the past and present spending to help make some critical decisions in the scheduling and control (Taylor, 2008).
The specific tools intended for use in this project are varied and diverse. Revenue projection, profit and loss projection and capital analysis tool will be an important tool that would be used for the project. These tools would be used because they touch on a wide range of issues that are important to the wellbeing of the business. The tools will also help in making readjustments where necessary to the extent there will be limited hiccups experienced in the scheduling and budgeting process.
References:
McPhee I. (2008). Developing and managing internal budgets. Common wealth of Australia. Retrieved from: < http://www.anao.gov.au/~/media/Uploads/Documents/developing_and_managing _internal_budgets1.pdf.>
Rotondi, Ann. M. (2000). Create a Budget Works for You. 46 Nonprofit Worlds, Vol. 15, No. 4. Retrieved from: < http://www.cfw.org/document.doc?id=374.>
Taylor, J. (2008). Project scheduling and cost control: Planning, monitoring and controlling the baseline. Ft. Lauderdale, Fla: J. Ross Pub.
Valenti, D. C. (2003). Training Budgets Step-by-Step: A Complete Guide to Planning and Budgeting Strategically-Aligned Training. Hoboken: John Wiley & Sons.
