Budget Manual
The project master budget integrates and
summarizes the project functional budgets. At times, the master budget is also
referred to as the finance budget or profit plan. The project master budget is
prepared in the form of a manual. The text of a typical Project budget manual
may summarize the following. The detailed working patterns are attached as
schedules or appendices with the text:
a) Project planned objectives
These are
stated in physical and financial terms with the plan assumptions and the
functional organization of work.
b) Organization of responsibility centres
It highlights
the division of the functional organization into responsibility centres (and
their being further split up into work-centres where applicable) with the tasks
and resources assigned to each responsibility centre.
c) Sales revenue budget
It reflects
the monthly or quarterly financial targets for the overall project and its
breakdown for each production centre and other revenue earning sources.
d) Production cost budget
It covers the
production cost of goods sold, and it can be further split up into direct costs
and indirect costs. These costs can be suitably arranged so as to bring out the
production cost budget for each responsibility.
e) Project general and administration expense
budget
It represents
the overall site office, administration, and head office expense budget,
arranged in conformity with the finance heads of accounts and the functional
needs.
f) Budgeted financial forecasts
These include
the profit and loss statement, cash flow forecast and forecast balance sheet.
