Budgeting procedures

Case study on SHINWARI SALTISH restaurant

budgeting

Budgeting refers to the setting of the expenditure with respect to the organization’s core function which is responsible for the overall functionality of the firm.

Budgeting is the setting and allocation of the capital which is then used in the proper way to achieve the set or designated targets of the firm.

Revenue Estimation

performed in the executive branch by the finance director, clerk's office, budget director, manager, or a team.

Budget Call issued to outline the presentation form, recommend certain goals.

Budget Formulation reflecting on the past, set goals for the future and reconcile the difference.

Budget Hearings can include departments, sections, the executive, and the public to discuss changes in the budget.

Budget Adoption final approval by the legislative body.

Budget Execution amending the budget as the fiscal year progresses.

Budgeting Procedure

Update budget assumptions. 

Note available funding.

Step costing points.

Create budget package.

Issue budget package.

Obtain revenue forecast.

Obtain department budgets

Validate compensation.

Validate bonus plans.

Obtain capital budget requests

Update the budget model.

Review the budget.

Process budget iterations.

Obtain approval.

Issue the budget

Load the budget

Verify loaded budget

TYPES OF BUDGETS

Operational budget - An operational budget is the most common type of budget used. It forecasts and tries to pretty closely predict yearly revenue and expenses for a business.

Cash flow budget - A cash flow budget details the amount of cash you collect and pay out. This is generally tallied on a monthly basis, but some businesses tabulate this weekly. In this budget, you track your sales and other receivables from income sources and contrast those against how much you pay to suppliers and in expenses. A positive cash flow is essential to grow your business.

Capital budget - The capital budget helps you figure out how much money you need to put in place new equipment or procedures to launch new products or increase production or services. This budget estimates the value of capital purchases you need for your business to grow and increase revenues.

Budget Planning Models

Budget models are financial projections that allow companies to plan for future cash inflows and outflows.

Budget planning models support general business operations by setting financial goals for each operational department.

Budget models help companies determine how much income they must earn to pay for the expenses generated from normal business operations.

Many companies have capital planning budgets to determine if any major expenditures for equipment or production facilities are needed.

Shinwari saltish restaraunt

Shinwari saltish restaurant

A restaurant of namak mandi dishes of peshawer first opened in blue area islamabad in 1992 .

Founder and owner of this restaurant was

NASIR KHAN SHINWARI(late).

Owner of Shinwari Saltish now is YOUSAF KHAN SHINWARI.

SHINWARI SALTISH came out to be a trend setter in the taste of people of islamabad.

Soon it became symbol of peshawer namak mandi dishes.

It has two branches, first in blue area and the other in rawalpindi saddar.

Main dishes of SHINWARI SALTISH are

Mutton karahiMutton tikkaDumpukhtKaabli pulaoKhadda sajjiPatta tikkaChicken chargha etc.

Mission statement

Shinwari Salish's goal is to multi-faceted success. Our first responsibility is to the financial well being of restaurant. This goal can be achieved by considering on

Effects of product on health and well being of our customer

And the high quality of fairness attitude and understanding among management, staff and customers.

Anticipate it’s Costs

In the restaurant, budgeting is often a game of balancing costs and income. In fact, a budget is much like a profit and loss (P&L) statement extended over a longer period of time. Shinwari saltish account for the following costs in its annual budget:

Rent or mortgage payments Taxes Labor/payroll Utilities Loan payments Operational supplies Repairs and maintenance Marketing Training Food service

Restaurant expenses

There are many expenses involved in operating a restaurant:

Cost of goods soldOccupancy cost Payroll or labor cost.Operating expenses

BUDGET PROCEDURES OF SHINWARI SALTISH

Shinwari Salish's include all operating costs, and is based on expected income for the year.

An annual budget gives it goals to reach and limits to beat. The budget is also essential to plan for the restaurant's future spending.

Plan by Month or Period

Shinwari saltish use a system of 12-month or 13 four-week periods to track their annual budget. By breaking the budget down into these types of sections, it is easier to see when money is moving in and out of the restaurant.

Determine it’s Projected Sales

Ascertaining its projected sales, also known as a sales forecast, helps it to figure out how much restaurant will make in sales during a given period.

Shinwari saltish plans to spend about 30 percent of its budget on food, 25 percent on labor, 10 percent on rent, and 3 percent on utilities. The rest goes in small parts to operational expenses, marketing, taxes, maintenance and other variable costs.

Swot analysis

StrengthIt’s taste is its biggest strengthIts dishes are pure and cleanIt’s dishes are just prepared by salt, no

extra spices are addedShinwari’s do not compromise on taste

and quality of food.

Weakness

It has a poor management system.

It’s short of capital to expand its registered branches unfortunately.

Opportunities

Offer To open shinwari saltish in U.A.E.

Offer had came from a multinational company to start shinwari in partnership

Threats

Misuse of the brand

Competitors expanding their setup.

Increasing rate of meat.

Recommendations

Keep an eye on your profit and lossConduct inventory consistentlyPortion food correctlyKeep record of all waste foodTrain employees to careWork on sitting arrangements.

SHINWARI SALTISH RESTATAUNTBUDGETING REPORTYEAR 2012.

January February March April May June

Sales Budgeted Actual Budgeted Actual Budgeted Actual Budgeted Actual Budgeted Actual Budgeted Actual

Food and drinks 2,000,000 2000000 2,000,000 1800000 2,000,000 1800000 2,000,000 2000000 2,000,000 2500000 3000000 3000000

Total Sales

Cost of Goods Sold (COGS)

Food and drinks 1400000 1400000 1400000 1400000 1400000 1200000 1400000 1200000 1500000 1800000 2000000 1800000

Total COGS

Gross Profit 600000 600000 600000 400000 600000 600000 600000 800000 500000 700000 1000000 1200000

Labor

Manager Salary

Employees

Overtime

Total Labor 200000 200000 200000 200000 200000 200000 200000 200000 200000 200000 200000 200000

Occupancy Expenses

Rent/Mortgage 120000 120000 120000 120000 120000 120000 120000 120000 120000 120000 120000 120000Property Tax

Insurance

Utilities 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000Waste Removal 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000Water and Sew er 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000Equipment Repairs 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000Building Upgrades

Indirect ExpensesPayroll 25000 25000 25000 25000 25000 25000 25000 25000 25000 25000 25000 25000Other insurance

Marketing 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000Training 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500Supplies 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000Other 411500 411500 411500 411500 411500 411500 411500 411500 411500 411500 411500 411500

Net Profit/Loss 188500 188500 188500 -11500 188500 188500 188500 388500 88500 288500 588500 788500

Thanx…. By JAVARIA MAZHAR