Describe what the following budgets/ reports are and how they might be used to inform a team’s operations.
- Variance analysis. Comparing the difference between the actual figures and the budgeted/targeted levels of the businesses performance. The analysis includes an explanation of the difference between actual and expected figures as well as an evaluation to why the variance may exist. The purpose of this is to assist in determining what may have gone right or wrong and to help in future decision-making.
- The general ledger. A company's main accounting records. It's a complete record of financial transactions over the life of a company. It holds account information that is needed to prepare financial statements, and includes accounts for assets, liabilities, owners' equity, revenues and expenses.
- A sales analysis report/ budget report. Sales analysis reports are used to measure and monitor sales performance. It can include figures such as actual sales revenue, sales goals, kpi's, sales profit, and the type of products sold.
- Managers can use this information to develop sales strategies, better understand past results and to help forecast future sales.
- Variance analysis reports. Variance analysis reports help quantify and identify the difference in actual expenditures or revenues between fiscal years and quarters. In some cases, variance is calculated by comparing budget to actuals and in others the comparison is based solely on actuals.
- The revenue and expenditure report/ budget. The balance between the incoming revenue and the expenditure relating to it over a period such as coffee machine maintenance and hire. Generally, it's an expense incurred to support current operations and not one that adds value to something.
- Management need access to reports to analyse the current, past, and forecasted 'health' of the business. They need to use the reports to determine decision making to grow the business.
- Investors need to see the reports to determine whether it's a viable option to invest money or goods into the business.
- Creditors need to view reports to see whether the business has enough cash flow/equity/assets to back-up a further debt and whether the institution will lend the money and how much it will grant. d) The government needs to see reports to understand whether the business is being compliant in OHS and other legislations relating to the business. It also needs the information to determine if accounting information is being recorded correctly.