Business finance is classified as a process which makes the involvement of all the basic factors that are required to maintain the expenditure along with the financial status of an organisation (Diebold, 2015). With the help of an efficiently and appropriately developed business finance, the overall productivity of the business can increase to a huge extent. The report is about preparing a budget for TownScape along with the important cost drivers that can help TownScape. Also, it involves alternative budgeting methods that can be involved in order to increase the overall productivity of TownScape at a higher extent. The potential application of all the alternative methods have also been included in the report.
Purpose of making a budget
A budget is termed as a very essential aspect of the organisation performing business on a large platform. Usually, a budget is meant for a year only, but it can vary as well according to the policies and rules of the government. There are enormous aspects of a budget that should be ensured in TownScape and their involvement throws much influence on the operations and processing of the services. The purpose of a budget in TownScape is important because of the factors that are discussed as below :
A proper budget made by TownScape can help them in analysing their actual market position that how much they have gained the profits and also, if they have come down on the overall market shares. Thus, it can also be considered as an effective tool that can help in evaluating the overall business performance of TownScape. While analysing, if their business is going on a higher level, then they can stay ensured but if they observe some sort of decrease in the market shares, then they can make involvement of some modifications and improvements so that they can again become able enough to achieve all their targets and goals, thus they can again reach to that market position in a shorter period of time (Titman, Keown and Martin, 2017).
Also, if a structured and efficient budget has been made by TownScape, then it can surely prove beneficial enough for TownScape. But the fact here which is to be ensured is that the making of budget should involve the support and time of all the employees of TownScape. It is because all the employees can have an appropriate rate of decision making in which they all can represent their ideas and views. Also, if any of the employee think that there is some strategy or technique that can help their business to increase etc. so, in an effective decision making, all these factors can be discussed and that can actually help in making a balanced budget for TownScape.
Another important factor in which budget can seem beneficial in TownScape is that it can easily help in monitoring the performance and productivity rate of the operations and processes of TownScape. It is because after making the budget properly, they can analyse that how much they have gained the profits or to how extent, they have lose shares in the share market.
Process of Budgeting in TownScape
TownScape can ensure following a proper budget so that it can help in maintaining a sort of balance between all the operations and processes and that too in an efficient way. The whole process of budgeting for TownScape is discussed as under :
The first step is to set goal that seems realistic enough. It is considered as one of the very important factors because there is a lot of difference between assumptions and realistic goals. Working on goals that cannot be achieved is not worthy and wastes much amount of time as well. Therefore, TownScape can ensure focusing and implementing on a realistic goal so that it can stay worthy enough and thus, ca further help the company to achieve its targets as well.
The second step is ensuring the basic amount they can spend on their processes because analysis of that can help them in making the budget in a wise manner.
The final step is the designing of the budget. It should be done in a structured way so that the company can be easily identify and analyse their processes and operations. Also, they can be able to know that on which position they are standing in the market place and on the basis of that, they can take further actions and operations.
Important cost drivers for TownScape
Cost drivers are considered as the factors that can help TownScape in managing the expenditure of the processes and operations in a way that the financial status of the company can stay balanced and managed. It is obvious enough that the overall competitiveness in the market has maximized to a huge extent, so it is important if TownScape makes involvement of the cost drivers that seems essential enough and also can prove beneficial enough in gaining a satisfied number of customers, thus an increased rate of productivity as well (Columba, Gambacorta and Mistrulli, 2010). Some well known cost drivers that can be involved by TownScape involves headcount of the employees, overall number of leads etc. It is because if TownScape can ensure analysing their expected budget and the profits they have received, it can help them in analysing that how much they have benefitted through the means of making and implementing a structured budget. Also, the involvement of traditional budgeting can also help TownScape to achieve all their outcomes and objectives in a much faster rate because it is considered as one of the simple ways of making and implementing the budget.