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Budgets and Forecasts

Presentation for: Professionals Seminar, GCPA Conference 2010 Presenter: Stephen Moore, Gloucestershire Healthcare Team Date: 29 th April 2010. Budgets and Forecasts.

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Budgets and Forecasts

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  1. Presentation for: Professionals Seminar, GCPA Conference 2010 Presenter: Stephen Moore, Gloucestershire Healthcare Team Date: 29th April 2010 Budgets and Forecasts The Royal Bank of Scotland plc; Registered in Scotland Number 90312; Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. Authorised and regulated by the Financial Services Authority. National Westminster Bank plc; Registered in England Number 929027; Registered Office: 135 Bishopsgate, London, EC2M 3UR. Authorised and regulated by the Financial Services Authority. The Royal Bank of Scotland plc and National Westminster Bank plc are members of the Royal Bank of Scotland Group

  2. Content • Background • Who to involve and Where to start? • Budgets v Forecasts – Important differences • Examples of good/ bad • What to do next? • Useful Information and tips • Summary • Questions

  3. Background • Introduction to Budgets and Forecasts • Reasons for Importance • Economic Climate • Minimal fee increases • Personalisation/ Delayed Payments • Investment in Management Account System

  4. Who to involve • Depends on Situation/ Size/ Complexity of Business • Purely directors/ partners • Financial controller/ Bookkeeper • Accountants? • All staff buy in

  5. Where to Start? • Review historic performance. • Year end figures for budgets • Bank statements for cash • Occupancy levels/ Hours • Planned expenditure for the year? • Capex? • Increased staff? • Exceptional costs?

  6. Budgets versus Cash Flow Forecasts • Budgets • Profit and Loss • Includes Depreciation, Loan Interest, Hire Purchase Interest • Easier to plan than a cash forecast • 12 months • Cash Flow Forecast • Focus on account balance • Excludes non cash items but includes debt servicing costs, tax repayments • Harder to predict i.e. Late payments? • 13 week forecast

  7. Typical Examples • Budgets • Cash Flow Forecasts

  8. What to do next? • Put them in a drawer and forget about them – Job Done! • Have a good look at the figures. Do they appear achievable? • Any glaring figures standing out? If so should I question with suppliers/ competitors? • Ongoing review against your actual performance – Very Important • Weekly, Monthly, Quarterly

  9. Useful Tips to Save Expense Peaks • Staff Costs • Holiday Pay and Agency Staff • Loan Costs • Fixed versus Variable • Direct Payments • Direct Debit Sponsorship

  10. Summary • Background to Budgets/ Forecasts • Ongoing issues in the care sector • Where to go for help • Information for the Management not just the Banks • Important to review regularly • Questions

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