The DMR global service process to develop its master budget

The DMR global service process to develop its master budget

The DMR global service selects the following process to develop its master budget:

• Updates assumptions: The company regularly updates its financial assumptions for each of the human resources support it provides to all of its clients. It is essential to assume the possible outcome before committing any steady budget.
• Noting available funding: The requirement of available financing should be prepared before creating a budget. DMR global needs to analyze all the possible areas and required financial resources for those areas.
• Stepping into costing points: Costing points should be set up before to understand the existing costing structure. The company should consider all the costing points while allocating finance for each service area.
• Budget package: The budgeting standard of the previous area should be analyzed to find out flaws accurately. Hence, a new budget package should be developed by DMR global by resolving all the budgeting flaws.
• Revenue forecast: Revenue forecast for each of the budgeting segments is necessary because it helps to address the capability of existing financial resources to fulfill the organizational demand.
• Obtaining a departmental budget: DMR global should receive to understand the financial requirement and required allocation for each department of the company.
• Compensation validation: Compensation validation analyses the required amount of increase, and decrease, and the surplus amount in the budget. DMR global follows this step to control financial fluctuation.
• Bonus plan validation: The company validates bonus plans for the employees to maintain the ethical standard and employee relationship. Employees are provided a bonus for their efficiency in selecting required human resources for the client company.
• Budget review: Budget review is the penultimate stage of budgeting when the financial manager of DMR global evaluates the budget so far for the one final time.
• Budget submission: The budget is submitted after gaining approval from the higher authority of the organization.

The budget process of a service company is different from the budget process of a manufacturing company. The manufacturing budget includes direct labor cost, plant, and equipment cost, manufacturing overhead cost, and raw materials cost. On the contrary, a service budget includes only equipment cost, staffing cost, and service selling cost.