Management of Budget and Forecasts for Depreciation-myassignmenthelp

Question: Discuss about theManagement of Budget and Forecasts for Depreciation. Answer: Few potential areas of improvement for the given company are The company must look closely for the overall net expenses that the company is incurring as all the expenses are more then what was expected. The commission expense is most deviated from what was expected and the company must look for the same and take necessary steps to make sure that in future there are so such deviations that affect the total cost of the company. Even in case of cost of goods sold the expenses are more than expectations but the deviations are not as high as in case of the net expenses that the company has incurred in the course of its operations. The expenses are part of day to day operation of the company like advertising, bank fees, depreciation etc(Goldmann, 2016). There are few potential areas of concern that the company must pay a heed to like The total net expenses are much more than what the company expected hence that has led to an increment in the total cost of the company and has affected the overall profit of the company. The gross expenses that includes the total cost of the goods sold is also high then what the company had expected. Thus these are the few areas of concern that the company must pay heed to. The company must check that the budget is being prepare considering all the major factors that are affecting the day to day operations of the company because of which there is an increment in the total cost for the company(Mayntz, 2017). The other areas like increment in the total revenue must also be checked to make sure such conditions persists in the future so that the company is earning more amount of profit in the future also. Thus company must check that also properly. Three steps by which the company can improve its financial performance- Reduction in the total cost It can be seen that the total cost that the company has incurred is more than the standard as set by the company. Thus if the company is successful in reducing that cost the company will earn more profit in the future. By making better investments- If the company makes smart use of the excess revenue that it has earned in this time period and invests it properly so that it earns more revenue in the future, the overall financial performance of the company will improve in that case(Fay Negangard, 2017). By making proper budgets As we can see that the company has not prepared its budget as it must have thus the total cost and revenue are more than expectation standard. Thus the only way by which the company can exemplify its position financially is putting more efforts in preparation of the budget so that in future the actions of the company are more systematic(Salahuddin Gow, 2016). This will help the company in earning more amount of profit and also help in better management of its finances(Das, 2017). Two options by which the company can make more effective management decisions are Taking expert opinion An expert opinion will help in identifying the main areas of risk that the company might be facing(Laursen Thorlund, 2016). It will help them in understanding the underlying issues in the management of the company and can also suggest steps by which the company can improve its present position. So the company must go for expert advice as and when needed(Gartland, 2017). Proper research and analysis- It is important that while formation of the budget the company must closely analyze the overall past data of the company and must do proper market research and survey. All this will help in proper formation of the budget of the company and the company can also use the same for future reference. The more accurately the company prepares the budget the more less the variances will be(Tysiac, 2017). Thus it will help in better management of the variances that the company is facing and will help the management in taking effective decisions that will help it in future. These are the few steps that the management of the company can take for better management of the overall variances of the company. References Das, P., 2017. Financing Pattern and Utilization of Fixed Assets - A Study. Asian Journal of Social Science Studies, 2(2), pp. 10-17. Fay, R. Negangard, E., 2017. Manual journal entry testing : Data analytics and the risk of fraud. Journal of Accounting Education, Volume 38, pp. 37-49. Gartland, D., 2017. The importance of audit planning. Journal Of Accountancy. Goldmann, K., 2016. Financial Liquidity and Profitability Management in Practice of Polish Business. Financial Environment and Business Development, Volume 4, pp. 103-112. Laursen, G. Thorlund, J., 2016. Business Analytics for Managers: Taking Business Intelligence Beyond Reporting. Second ed. CANADA: Wiley Publisher. Mayntz, R., 2017. Networked Governance. s.l.:Springer. Salahuddin, M. Gow, J., 2016. The effects of Internet usage, financial development and trade openness on economic growth in South Africa: A time series analysis. Telematics and Informatics, 33(4), pp. 1141-1154. Tysiac, K., 2017. Rulemaking gives auditors a chance to provide more insight. Journal of Accountancy.