BUDGET POWERPOINT

June 15, 2017

To: All employees

From: Nelson Mulinya, Senior Manager

Date: June 13th, 2017

Subject: Annual Budget

I would like to request the finance department to present to me the projected cost for the incoming year by 26th June 2017. It has always been a pleasure to receive the budget for the whole year earlier enough and this time I expect nothing less but an excellent presentation. However, due to many hiccups that usually emerge in the course of the year, I would appreciate if this time the budget is broken down on a quarterly basis. I prefer this way as it will help us minimize the risk and ballooning of unexpected cost. The costs must be presented in our normal PowerPoint format, and it should be consistent with general accepted accounting principle (GAAP).

Due to the many projects that the company has this time around, the budget presented should try and minimize the administrative expense to avoid a scenario where the company operates with borrowed cash. The payroll, accounting, and auditing fee must be minimized so that it is used elsewhere. There are also many uncertainties that we expect this time as a result of the real estate market. As a result, this has put us in a position where we cannot make critical decisions at this time. However, this should not prevent us from to speculating and coming up with reasonable figures that can be used as assumed values.

As a way of trying to reduce the recurrent expenditure and increase the investment capital, the company expects something different from the previous budget. The repair and maintenance cost, as well as the utility cost, must be minimized as possible. Capital consideration in budgeting is very imperative as you all know and I expect our business analysts to use two methods of analysis namely qualitative and quantitative method. These are helpful in forecasting the financial projection or growth. For instance, the quantitative methods usually use the expert factor and at some point the human element in budget analysis. The approach is normally based on data and avoids the guesses and perception of people. It will help us in predicting the variables like insurance expenses and contract expenses product, the prices and other things. Some of the quantitative methods include payback, net present value and the average rate of return.

However, from my knowledge and experience, some benefits of capital investment cannot be assessed in monetary values. It is therefore essential for the finance department to also consider qualitative analysis since the use of quantitative analysis can give to misleading information thus making the business to reject a worthy project. It is also worth noting that qualitative consideration plays a crucial role in a strategic investment. In this case, these are investments concerned with the ability of the business to make profits over an extended period. Intangible benefits characterize the strategic investments and uncertainties. They usually have very few solid savings compared to capital investments meant to cut cost. Some of the qualitative analysis that may influence capital investments are manufacturing flexibility, product quality and employee morale (Anderson et. al. 2012).

I am confident that the respective department will provide the necessary details needed to make sure that this budget meets the deadline. On the same note, I take this opportunity to ask each employee to cooperate with the finance department and help them to achieve our shared goal. In the case of any issue that comes up do not hesitate to speak out so that we can address it.

Those who have any question about this do not fail to see me.

Best,

Nelson Mulinya

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