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Manage budgets and financial plans
Course:- Managerial Accounting
Reference No.:- EM13228




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Complete the financial reporting for every period and develop recommendations using the templates provided.

Procedure

1. Read the case study.

2. Complete the financial reports for each period as requested.

3. Analyse the data and complete your recommendations in the space provided.

4. Complete a new budget based on your recommendations.

Proactive Management Consultants Pty Ltd (PMC) is a small service organisation that offers consultative services to a wide variety of clients and has been in existence for just over five years. Typically they advise their clients on professional development opportunities, organisational structure and simple training initiatives. Although the past 12 months have been profitable for PMC, they face a very uncertain future. Reducing government support, the global financial crisis, an increasingly competitive market and a client base that believe they are already paying too much.

PMC prides itself on the advice they give their clients, therefore, finance has never been their strength. The PMC board has approached your company to provide monthly financial reports and recommendations on how they could proceed with their financial plans.

PMC has provided each month's sales and expenditure data from which they require your company to complete the reporting in the provided templates, interpret the data and provide recommendations.

Accounts payable are entirely paid month-to-month whereas accounts receivable is calculated 60% current month, 30% last month, 10% second to last month: actual May sales = $42,100, actual June sales = $47,300. These figures will be required to calculate actual sales receipts for July and August.

PMC has also provided you with a list of initiatives they had planned to undertake over the next six months that have been budgeted for in their financial planning which they need you to consider in your recommendations. They are:

• anticipate large invoicing month in July due to number of leads

• 15th of August moving to new premises whereby rent increases to $3,500 per month

• all company motor vehicle registrations and insurance are due in July $18,000

• have sought an aggressive advertising campaign in October to invigorate lost clientele, $16,000

• To increase productivity PMC will upgrade all computers under expensed equipment in September at $12,000.

• Due to advertising campaign, PMC are recruiting two new consultants in October. This will add 30% to November's and December's payroll and $10,000 in recruitment and training during October and result in increased business (40% November and December).

• purchasing a licence to deliver an innovative training program in November for $20,000

• have contractual agreements in January and February that will generate $32,000 in sales

• three employees on annual leave will have 50% impact on sales in November

• conducting a professional development week for all staff in December $18,000

• employee bonuses due in December, anticipate $16,000.




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