Page 273 - Accounting Best Practices
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                            Exhibit 13.3 Sample Procedure Page           General Best Practices
                            Procedure: Update the annual budget
                            Responsibility: Controller
                            Steps:
                             1. Expense update. As of mid-November, issue each department a listing of its
                                expenses, annualized based on actual expenses through October of the cur-
                                rent year. The listing should include the personnel in each department and
                                their current pay levels. Request a return date of 10 days in the future for this
                                information, which should include estimated changes in expenses.
                             2. Revenue update. As of mid-November, issue the sales manager a listing of
                                revenue by month by business unit, through October of the current year.
                                Request a return date of 10 days in the future for this information, which
                                should include estimated changes in revenues.
                             3. Capital expenditure update. As of mid-November, issue a form to all depart-
                                ment heads, requesting information about the cost and timing of capital
                                expenditures for the upcoming year. Request a return date of 10 days in the
                                future for this information.
                             4. Automation update. As of mid-November, issue a form to the engineering man-
                                ager, requesting estimates of the timing and size of reductions in headcount in
                                the upcoming year due to automation efforts. Request a return date of 10 days
                                in the future for this information. Be sure to compare scheduled headcount
                                reductions to the timing of capital expenditures, since they should track closely.
                             5. Update the budget model. This task should be completed by the end of
                                November, and includes the following steps:
                                1. Update the numbers already listed in the budget with information
                                  received from the various managers. This may involve changing ‘‘hard-
                                  coded” dollar amounts or changing flex budget percentages. Be sure to
                                  keep a checklist of who has returned information so you can follow up
                                  with those personnel who have not returned it.
                                2. Update the ‘‘Prior Year” cells on the left side of the budget model with
                                  estimated year-end balances (primarily for the balance sheet).
                                3. Update the ‘‘Last Year” cells on the right side of the budget model, using
                                  annualized figures.
                                4. Verify that the indirect overhead allocation percentages shown on the
                                  budgeted factory overhead page are still accurate.
                                5. Verify that the Federal Insurance Contributors Act (FICA), State Unem-
                                  ployment Tax  (SUTA), Federal  Unemployment Tax  (FUTA), medical,
                                  and workers’ compensation amounts listed at the top of the staffing bud-
                                  get page are still accurate.
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