Budgeting



Budgeting is a process of creation, approval of budgets and their monitoring. Separate budget is a financial document, which identifies a financial plan of actions, whereon data and events are presented, which shall be effected in the future.

Budget is a key tool of a management control system. It has a lot of looks and forms; its structure is defined by business scale, subject, targets and experience of developers. Any budget shall provide information in an accessible way so that its content shall be understandable for concerned users.

Budgets are developed for the whole organization as well as for its departments with a purpose of:

  • business planning;
  • control of business activities;
  • coordination of different types of company activities and its departments;
  • management and staff incentive for achieving goals;
  • assessment of managers performance and their education.

LLC “PMsmart” develops for our Clients core type of budgets, which help to our Clients in effective cashflow and financial tools management, in minimization of company financial risks.

Limited liability company “PM smart consulting” renders the following services within “Budgeting” profile:

We have a wealth of experience inside financial management departments in diverse fields of economy. You are welcome to study “Financial management” profile in more detail by following a link.

“Enjoy what You like, we will take care of the rest of Your business”.

With love to our work and every Client.

Income and expense budget

Income and expense budget is one of the principal budgets of a company that is forming a balance between planned income from selling of goods / works / services, other income and total expenditures for the defined period.

Income and expense budget is developed for profit planning that a company can receive for the budget period. It includes data on cost and revenue. Income and expense budget allows the owner and managers of a company to see how many funds shall be invested so a company can be profit-making and can successfully develop further, which financial situation arised as of today.

 The targets of developing such financial plans are following:

  • efficiency determination of business’s activities and company departments for the defined period;
  • correcting of strategic plans;
  • setting of limits on main expenditure items;
  • achievement of a company profitability and opportunities of profit markup;
  • tax efficiency and optimization of other payments to the budget;
  • disclosure of revenue structure, costs and expenses.

Detailed and deep analysis of Income and expense budget broken down by items and units allows to discover management weaknesses, to take necessary management decisions to change the situation. In order to do that Income and expense budget shall be developed by expert and responsible people. Play valuable roles:

  • qualification of specialist and his/her experience;
  • logical thinking, analytical mind, ability for data structuring and data consolidation;
  • right motivation of an executor;
  • drive for results.

Precisely these PMsmart specialists develop Income and expense budget for our Clients.

INCOME AND EXPENSE BUDGET-SETTING PROCESS FOR OUR CLIENTS BY PMSMART
  • Study of Your request 
    We review of Your request, requirements; clarify which parameters and data will be interesting, what will be significant in estimating, in which sections information shall be viewed;
  • Evaluation of a company structure 
    We analyze Your company structure, business units; outline centers for financial responsibility;
  • Analysis of business profile 
    We study Your business profile by revenue and expense items;
  • Collection of Initial Data 
    We estimate a company budget policy as well as we collect initial data – operating budgets (sales budget, budget on costs of labor, commercial expenses and etc.) or if there are no such budgets, we develop initial data by ourselves;
  • Development of Income and expense budget 
    We elaborate Income and expense budget for You in most convenient structured format with terms from 1 year to 1 month depending on business scale;
  • Approval 
    One of two profession-oriented PMsmart partners checks elaborated Income and expense budget and makes adjustments if required;
  • Transfer of elaborated Income and expense budget to the Client 
    Ready-made Income and expense budget is transferred to the Client for the following usage in management targets;
  • Presentation to the Client 
    We are ready to hold a presentation with a purpose of detailed verbal definition of elements and items of a budget, as well as to provide our expert estimation of a company financial situation. We are also happy to train responsible employees to work with a budget.

Business scales can be different, therefore we find the best optimal scheme of work for every Client.

Many Clients have already committed to develop Income and expense budget to PMsmart team.

Please, put Your trust in us as well.

And remember…

“Enjoy what You like, we will take care of the rest of Your business”.

Cash Flow budget

Cash flow is one of the key aspects of a company operative activity. Such cash flow is embodied in Cash Flow Budget, which forms cash flow forecast of a company as follows:

  • where and how many funds shall be spent;
  • how many funds are supposed to be received in the course of company’s business.

Therefore, Cash Flow Budget shows funds balance at the end of budget period and financial standing of a company for each budget period, so cash balance at the end of month, quarter and year. Its main task is to ensure a balance of financial standing, to avoid cash deficiency, to minimize risk of cash flow constraints for covering of company operating costs.

Any organization shall do careful planning of cash flow, such as a very big cash balance proves that financial resources have not been used with maximum efficiency, and a small cash balance shows that a company is close to condition of failure to cover its operating costs. Always remember, without money business can not function!

Detailed elaboration of Cash Flow Budget allows to properly manage financial resources of a company, to forecast cash balance, to take and correct strategic solutions in time. In order to do that Cash Flow Budget shall be developed by professionals. Play valuable roles:

  • qualification of specialist and his/her experience;
  • analytical mind, attention to details, precision;
  • ability to work with huge data;
  • ability for data structuring.

Precisely these PMsmart specialists develop Cash Flow Budget for our Clients.

CASH FLOW BUDGET-SETTING PROCESS FOR OUR CLIENTS BY PMSMART
  • Study of Your request 
    We review of Your request and information about company; study of a company payment policy;
  • Evaluation of a company financing sources 
    We analyze all possible sources of payments-in and terms of their actual receipts;
  • Development of the general company cash outflows 
    We collect the general company cash outflows: payroll, tax liabilities, rent, insurance and other expenses. Such expenses can be collected from separate operating budgets;
  • Development of Cash Flow Budget 
    We elaborate Cash Flow Budget for You with terms from 1 year to 1 month depending on business scale;
  • Approval 
    One of two profession-oriented PMsmart partners checks elaborated Cash Flow Budget and makes adjustments if required;
  • Transfer of elaborated Cash Flow Budget to the Client 
    Ready-made Cash Flow Budget is transferred to the Client for the following usage in management targets;
  • Presentation to the Client 
    We are ready to hold a presentation with a purpose of detailed verbal definition of elements and items of a budget, as well as to provide our expert estimation of a company provision by financial resources. We are also happy to train responsible employees to work with a budget.

Business scales can be different, therefore we find the best optimal scheme of work for every Client.

Many Clients have already committed to develop Cash Flow Budget to PMsmart team.

Please, put Your trust in us as well.

And remember…

“Enjoy what You like, we will take care of the rest of Your business”.

Payment schedule

Cash Flow Budget, developed for a term of 1 year to 1 month, provides to organization users common ground for cash flow management of a company. However, company cashflow within a month can be high-intensity and unsteady, therefore there is a necessity to do operative management of cashflow.

Operative management of organization cashflow is development of company payment schedule, which provides with management of current financial operations and company resources in the short term (generally to 1 month), therefore planning payments are shown in more detailed view, and calendar periods can be equal to 1 day.

Payment schedule presents a planned financial document, which forms daily cash inflow and cash outflow of a company. This allows to managers and owners of a company to take decisions on whether to proceed with different payments at this time. Therefore, a primary target of payment schedule is to elaborate cash flow schedule for the short term in order to minimize cash surplus and to avoid cash deficiency, to guarantee cover of expenses for the foreseeable future.

Payment schedule, which PMsmart develops for Clients, solves the following tasks:

  • improves the efficiency of cash assets turnover of a company by maximally synchronizing of cash inflow and cash outflow;
  • organizes priority of payments based on their importance for the company and legally;
  • fulfils function of current monitoring of the company financial situation;
  • achieves financial standing of the company in the short term;
  • lets the managers of the company to take operative decisions.

Running of payment schedule, which is developed by PMsmart, gives many advantages ahead of competitors to our Clients:

  • planning and forecasting function of financial standing of the company is fulfilled, therefore flexibility is appeared and possibility of responding to changing economic factors exists;
  • possibility to build proper credit policy of the company exists and to lead a monitoring of optimal credit suggestions in advance;
  • as a result the level of trust to managers of the company from owners, creditors, mother company and other interested users is increased.
PAYMENT SCHEDULE-SETTING PROCESS FOR OUR CLIENTS BY PMSMART
  • Study of Your request 
    We review of Your request and information about company; study of a company payment policy, analyze Cash Flow Budget in case its availability;
  • Planning of period 
    We define detail of period of payment schedule based on incurred analysis;
  • Development of planning payment schedule 
    We develop planning payment schedule based on planned cash inflow and cash outflow. We estimate cash balance at every step of conducting operations. The purpose is to form well-balanced cash at every step of operations, to avoid big cash surplus and cash deficiency for cover of company’s liabilities. In this regard, it may become necessary to “level” payment schedule, therefore correction of expenses can be made;
  • Correction of payment schedule 
    We lead correction of payment schedule and we drive it to well-balanced scenario;
  • Approval 
    One of two profession-oriented PMsmart partners checks elaborated payment schedule and makes adjustments if required;
  • Transfer of elaborated payment schedule to the Client 
    Ready-made payment schedule is transferred to the Client for the following usage in management targets;
  • Presentation to the Client 
    We are ready to hold a presentation with a purpose of detailed verbal definition of elements and items of payment schedule, as well as to provide our expert estimation of a company provision by cash. We are also happy to train responsible employees to work with payment schedule.

Business scales can be different, therefore we find the best optimal scheme of work for every Client.

Many Clients have already committed to develop payment schedule to PMsmart team.

Please, put Your trust in us as well.

And remember…

“Enjoy what You like, we will take care of the rest of Your business”.

Scenarios forecasting

You are an experienced manager of a company, but outside environment and its change often is not within Your control. “Outside environment” is comprehended as follows: state guidelines, change of normative & regulatory framework, change of Clients’ owners and managers, entry into a market of strong competitors.

Imagine that Your biggest Client plans to terminate the contract that involves 50% of Your personnel; and such fact can happen in a moment (usually work contracts / service contracts foresee one-side termination of a contract by the Client by preliminary notification of the Executor, in general, 2-4 weeks prior to the cancellation date). For such short term theoretically possibly but difficult practically to conclude the agreement for the same scope of work. In this case, there is a necessity to do scenarios forecasting.

PMsmart team promptly helps to our Clients in the right strategic decision-making process based on forecasting of scenarios:

  • we state accurately forecasting financial standing of the company with due account for outside environment;
  • we determine critical points and define reaction methods;
  • we provide specific projection data for different scenarios for principal expense items;
  • we estimate possible ways to eliminate cash deficiency of a company;
  • we form a plan of optimal alignment of economic activity of a company (we determine effective amount of staff, provide recommendations on salary levels and reduction of separate expense items);
  • we provide tactical recommendations to the management.

Our Clients in small and medium business can often have other occasions. At the end of the year Customers suddenly accept the works planning to be closed in January of the next year and/or unscheduled payments for rendered services are transferred into account. Potentially it leads to large income before tax and big income tax or huge cash surplus. Strategic questions appear about tax efficiency, balance of cash flow. In such cases, Clients address to PMsmart.

PMsmart team promptly develops forecasts of annual scenarios, which help to our Clients in the right operative decision-makings:

  • we identify sustainable and optimal methods to increase cost in order to reduce income tax;
  • we determine exact total amount of possible bonuses to staff, putting into account company regulation on bonus award;
  • we define value of funds that are necessary to cover liabilities in Q1 of the following year;
  • we take into account resources that are necessary for the further reinvestment into the company for its development;
  • we achieve balance in figures of net profit, income tax and cash balance;
  • we provide plan of operative decisions to the Client.

Many Clients have already committed to develop forecasting scenarios to PMsmart team.

Please, put Your trust in us as well.

And remember…

“Enjoy what You like, we will take care of the rest of Your business”.

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