Effective budgeting tool and performance evaluation for a private trader
Marinucci, Simone (2021)
2021
All rights reserved. This publication is copyrighted. You may download, display and print it for Your own personal use. Commercial use is prohibited.
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2021112521774
https://urn.fi/URN:NBN:fi:amk-2021112521774
Tiivistelmä
This project research thesis designed an effective budgeting tool for a private trader as a commissioning company. The budgeting tool consisted of a master budget that is based on an operating budget and financial budget. Previously, the commissioning company never had a real budget structure, so this thesis provided a perfect opportunity to optimise the company’s processes and design one. Nowadays having a budget in a company’s organisation is becoming essential, and technology has made the process easier compared to how budgeting was handled years ago.
This thesis applied project research method and had 4 tasks to achieve the main target. Theoretical framework was investigated to identify appropriate structure for the thesis and definitions of key concepts used in budgets. Literature review focused on the theory and concepts behind budgeting. Budgeting tool was designed with Microsoft Excel and consisted of sales budget, expense budget, income statement budget, and cash budget, as well as performance analysis in order to understand whether the actuals are in accordance with budgeted figures.
The thesis started in February 2021 at the beginning of the first quarter and is about to end in the beginning of November. Because of this long timeline, the thesis has been able to show how budget corresponds the real facts. The variances between actual data and projected data are the main numerical findings. The variances are expressed in a numerical form in euro and also in percentages.
This thesis is meant to help the entrepreneur, who is also the author of this thesis, by building an effective master budget. This budgeting tool increases the quality and gives a better understanding of the company’s daily operations, and improves decision-making based on knowledge. When the budgeting tool is updated regularly, the data is modified accordingly. In conclusion, the budgeting tool presented in the excel tables shall be reviewed and updated if the underlying data or preconditions change and always for the next financial year.
This thesis applied project research method and had 4 tasks to achieve the main target. Theoretical framework was investigated to identify appropriate structure for the thesis and definitions of key concepts used in budgets. Literature review focused on the theory and concepts behind budgeting. Budgeting tool was designed with Microsoft Excel and consisted of sales budget, expense budget, income statement budget, and cash budget, as well as performance analysis in order to understand whether the actuals are in accordance with budgeted figures.
The thesis started in February 2021 at the beginning of the first quarter and is about to end in the beginning of November. Because of this long timeline, the thesis has been able to show how budget corresponds the real facts. The variances between actual data and projected data are the main numerical findings. The variances are expressed in a numerical form in euro and also in percentages.
This thesis is meant to help the entrepreneur, who is also the author of this thesis, by building an effective master budget. This budgeting tool increases the quality and gives a better understanding of the company’s daily operations, and improves decision-making based on knowledge. When the budgeting tool is updated regularly, the data is modified accordingly. In conclusion, the budgeting tool presented in the excel tables shall be reviewed and updated if the underlying data or preconditions change and always for the next financial year.