29 Jan Budget and Resource Management

Explain basic principles and tools of budget and resource management

Assignment: Provide brief explanations (2-3 sentences) for each items plus an overall summary of the importance of budgeting plus an overall summary of the importance of resource management.

Budget Management

Budget definition: An estimate of costs, revenues, and resources over a specified period, reflecting a reading of future financial conditions and goals.

One of the most important administrative tools, a budget serves also as a (1) plan of action for achieving quantified objectives, (2) standard for measuring performance, and (3) device for coping with foreseeable adverse situations.

http://www.businessdictionary.com/definition/budget.html

Budget Principles

Explain why each of these principles is important:

1.    Align with strategic plan

2.    Be conservative – underestimate your income and overestimate your expenses

3.    Involve key people

4.    Provide training on the budget process

5.    Disseminate the final budget widely

Budget Tools

Explain the function of each of these tools:

1.    revenue forecast

2.    expense forecast

3.    resource inventory

4.    cash flow forecast

5.    Monthly and annual reports for comparison

Resource Management Principles

Resource Management definition: The process of using a company’s resources in the most efficient way possible. These resources can include tangible resources such as goods and equipment, financial resources, and labor resources such as employees. Resource management can include ideas such as making sure one has enough physical resources for one’s business, but not an overabundance so that products won’t get used, or making sure that people are assigned to tasks that will keep them busy and not have too much downtime.

Source: http://www.businessdictionary.com/definition/resource-management.html

Resource Management Principles

Explain why each of these principles is important:

1. Align resources with strategic plan

2. Support the decision-making process with reliable data and analysis

3. Align the resources with the task

Resource Management Tools

Explain the function of each of these tools:

1. Resource plan

2. Resource inventory

3. Resource tracking system

4. Performance management system

5. Job analyses

5. Work schedules

6. Gantt charts

7. Work flowcharts