Master Budget for Services Companies PDF

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Master Budget for Services Companies...

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Master Budget for Services Companies Banks are the best example of services companies, over all the globe, they operate in similar process, and talk to each other in a common language, despite the location of nationality of the bank. Banks sell only services, and they get paid for their services according to Fee-Based rule, which means you will be charged for any financial service you will request, if you paid your university tuition, you will be charged, and if you requested a loan, you will be charged. [ CITATION Jul18 \l 1033 ]. AKBANK is one of the biggest banks in Turkey with 716 branches and 18 million clients. AKBANK provides many services, such as corporate and investment banking, commercial banking, SME banking, consumer banking, payment systems, treasury transactions and private banking, and international banking services [CITATION AKB21 \l 1033 ]. All services companies have two main budgets, operational and financial [ CITATION Kan15 \l 1033 ]. The operational budget includes SG&A, revenues, and salaries. While the financial budget includes the cash flow, balance sheet, and income statement. AKBANK is not an exception among services companies, AKBANK has a massive team of staff consists of more than 12 thousand employees. The bank must keep an eye on the direct labor budget as it is the biggest part of the bank’s expenses[ CITATION Kan15 \l 1033 ]. For such services company, the sales budget would be built according to the projected number of customers the bank might have in the next year, which can be projected based on the previous years’ information and data. The direct labor budget presents the number of staff the bank may recruit in the next year based on the expansion plans. In addition to that, the SG&A budget projects the budgeted general expenses that support the bank’s operations.

The master budget for AKBANK should also includes the cash flow (In & Out) for any investments or revenues. When comparing a manufacturing company to a services company, we will see significant differences in the balance sheets of these two types. The manufacturing companies has raw materials, equipment, and manufacturing locations, while the services companies do not have such assets. Besides, the manufacturing companies would have a line for goods and inventories in the warehouses, raw materials, and products, these will be registered in the company’s financial reports as assets. On the other hands, the services companies like AKBANK would present any kind of assets as account receivables not as assets, because basically these assets would generate more money for the company without any extra costs. By comparing the master budget for these two types of companies “manufacturing companies and services companies”, we will notice that the first type has listed in the master budget many assets like raw materials and equipment. While the second type the services companies will have only services costs such as internet fees, security services, IT services, and electricity fees. Therefore, AKBANK will focus during budgeting process on revenues generated from the newly targeted customers. On the other hand, manufacturing companies will focus during budgeting process on revenues generated from production and sales[ CITATION Hoy12 \l 1033 ] .

References AKBank. (2021). Retrieved July 21, 2021, from https://www.akbankinvestorrelations.com/en/aboutakbank/detail/Corporate-profile/13/16/0 Heisinger, K. & Hoyle, J. B. (n.d.). Accounting for Managers. Retrieved from https://2012books.lardbucket.org/books/accounting-for-managers/s05-what-is-managerialaccounting.html Kagan, J. (2018, January 9). Fee-Based Investment. Retrieved July 21, 2021, from Investopedia: https://www.investopedia.com/terms/f/feebasedinvestment.asp

Kandar, S. (2015, November 29). Budgeting in service sector. Retrieved July 21, 2021, from Slideshare: https://www.slideshare.net/SutanuKandar/budgeting-in-service-sector...