BUDGET ADMINISTRATION

AND DOCUMENTATION
Topic 6
LEARNING OBJECTIVES
 Understand the role of financial reporting in events

 Outline procedures in keeping financial records

 Methods of financial systems control

 Interrelationship between finance and other

business units
ROLE OF FINANCIAL REPORTING
Financial reporting is a means of:

 Highlighting problems

 Suggesting solutions to run the event budget

smoothly and profitably

 Communicate the critical issues of the event to the

Event Organisers and staff involved.
EXAMPLE

Exhibition (Trade)
Low Exhibitor Participation

 Suggest Reasons for low sales

 What are the repercussions ? Impact?

 Suggest solutions

 Time frame
REQUIREMENTS OF FINANCIAL
REPORT
1) Must relate directly to the event management area
(to which it is addressed)
 Narrow to individual cost centre

2) Figures in the report must be in same magnitude

and comparable
 Cannot compare profit and non-profit
event

3) Should describe how to take remedial action if there

is a significant problem
 If manpower cost is high, then reduce
staffing
FINANCIAL REPORTS? WHO READS THEM?
DISTRIBUTION
(1) Tax office – GST claims
 Overseas businesses & clients- they may want to
offset GST charges to increase event profits

(2) Client – review progress budgets

 “Actual” column can be used to show payments made
up to date

(3) Host organization – Profit and Loss

statement has to be presented
 E.g. STB will require P & L of Singapore GP so
as to account for the use of state funds for the event.
Introduction to
Financial Controls
INTRODUCTION TO FINANCIAL COSTS

Purpose?

1. Provide financial stability and

sustainability.

2. Ensure that business objectives are met–

which are:
INTRODUCTION TO FINANCIAL COSTS
 Accounts receivable and payable
 Stock control
 Asset control – Fixed, Investment, Current (assets
needed to be numbered, entered into registers, kept in
safe places)
 Payment is approved
 Goods and services meet specifications
 Incoming revenue is checked and banked
 Revenue totals are recorded correctly
 Debts are met
 All transactions are recorded and balanced
 Taxation requirements are met
 Financial matters are correctly reported to stakeholders
Procedures of
Financial Control
Systems
BUSINESS ACCOUNTABILITY

All systems/procedures
must be in place
Must be accounted for
 To Stakeholders
 Company directors, Client, Govt.
Funds

What are procedures? Example

 Every transaction recorded
 Payment of invoices
 Taxes paid
Description Responsibility of
Due diligence in seeking best quotation

In Typical Event Company

Purchases or Expenses are approved
Goods and services meet specifications
Payment is approved
Accounts are paid
Incoming revenue is checked
Revenue totals are recorded correctly
Debts are met
All transactions are recorded and
balanced
Taxation requirements are met
Financial statements are correctly
reported and reported to stakeholders
Description Responsibility of
Due diligence in seeking best quotation Sales personnel
Purchases or Expenses are approved Sales Manager / Accounts
In Typical Event Company
Sales / Operations
Goods and services meet specifications
Payment is approved Manager
Accounts are paid Sales / Accounts
Incoming revenue is checked Sales / Accounts
Revenue totals are recorded correctly Accounts
Debts are met Accounts / Management
All transactions are recorded and Accounts / Management
balanced
Taxation requirements are met Accounts / Management
Financial statements are correctly Management
reported and reported to stakeholders
Internal Controls over
Cash
INTERNAL CONTROLS
In small companies- very easy for cash to
disappear. Need control systems:

1. Employee’s duties and functions must be

segregated -prevents a person
misappropriating funds and concealing the
fact by forging entries in the books

2. Cash receipts must be recorded and checked

daily

3. All cash received must be banked in daily-

The bank deposit slip will serve as a control of
the cash received.
INTERNAL CONTROLS

4. All payments, except for petty cash payments,

must be made by cheque.

5. Cash must be verified-The actual cash on

hand must be compared with the source
documents.

6. The cash records must be compared with the

bank statement.

7. Floats should be checked regularly as there is

temptation when they are not checked at all.
Petty cash vouchers must be presented, each
clearly signed by recipient
Keeping Financial
Records
KEEPING FINANCIAL RECORDS

The system has to be developed keeping

the following factors in view :

 The system should be simple and easy to

operate. Complexity should be avoided.

 The system should give accurate, timely

and adequate information.

 The system should be elastic and capable

of adopting to changed situation.

 The system should be cost-effective. It

should yield a much higher return on capital
invested when planning the event.
TOOLS NEEDED

 Maintain financial records

 Use IT tools – calendaring and reminder tools,

software (SAP)

 Establish an efficient filing system – hard copies

 All financial documents to be sorted into

year/month and filed chronologically

 Keep track of deposits, invoicing

 Establish regular billing, credit and collection

 Keep good tax records

Inter-relationship
between cost & other
Functional Units
Inter-relationship between cost & other units
WHY IT’S IMPORTANT

ACCOUNTS
classifying costs and expenses
must be closely associated with
the organisation chart showing
principal management position
with the line of delegation of
authority, responsibility and
accountability.
 Look @ Organisation Chart

Events Trade Show Design Festivals

Sales & Mktg

Important component Costing

Cannot work independently
Inter-relationship between cost & other units
WHY IT’S IMPORTANT

Total involvement by all the

beneficiaries i.e. sales, production,
engineering, purchase, personnel, and
quality control departments.

The success of the system will finally

depend on the top management which
must extend full support to the system.
EXPLAINING THE INTER-RELATIONSHIP
(between cost & other departments)

Cost/Accounts Department
 keeping records connected with material, labour and expenses,
 analysing all costs of production, marketing and administration,
and
 for issuing control reports and data for decision making to the
executives, department heads, project managers.

A. Production Department
 control the scheduling, manufacturing and inspection of each job
or processed products to their finished stage in terms of efficiency
norms established.
 Costs incurred at each stage are measured and compared with
the norms.
e.g. Stage décor, graphic works, AV/Multimedia productions
EXPLAINING THE INTER-RELATIONSHIP
(between cost & other departments)

B. Production Planning, Research &

Design Department
 involve cost department for cost estimates needed for each type of
material, labour and machine process before a decision can be reached
in accepting or rejecting a design.

C. Personnel Department
 is interested to maintaining employee cost up-to-date.
 The wage rate and methods of remuneration agreed with the employees
form the basis for computing payroll. E.g. Full time, contract and
volunteers
EXPLAINING THE INTER-RELATIONSHIP
(between cost & other departments)

D. Marketing Department
 needs a good product at a competitive price.
 While cost cannot determine price, it can influence fixation of
price.
 Allows sales manager distinguish profitable with non-profitable
products and compare cost of marketing against sales volume.

E. Public Relations Department

 establishes good relations with the public in general and
customers, creditors, shareholders, and employees in particular.
 The cost department provides information concerning price, cost,
etc.
EXPLAINING THE INTER-RELATIONSHIP
(between cost & other departments)

F. Legal
 finds cost department helpful in keeping many affairs of the
company in conformity with the law, specially excise, customs,
sales tax and other legislation regarding maintenance of accounts
and cost records.
Event Financial
Challenges
EVENT FINANCIAL CHALLEGES
 Pay all bills on time. Never pay them before they are due
unless there is a discount offered for early settlement. There is a
disadvantage to paying early if no discount is earned – interest
could be earned on the money.

 It is inadvisable to extend credit to clients. Provide

large organizations with a pro-forma invoice before the date of
the event so that the necessary arrangements may be made
regarding the settlement of the account.

 Do not issue cheques when it is possible that there are

insufficient funds in the company’s account. Approach
creditors if there could be problems with settling bills. This
arrangement is better than a “returned cheque” by bankers.
EVENT FINANCIAL CHALLEGES
 Reconcile all cheque accounts once a month, as
soon as all the bank statements have been received. Avoid
letting these statements accumulate and then try to reconcile
many months.

 Make deposits on a daily basis. Money should be

deposited as soon as it is received. This allows for better audit
trail.
END.