Topic 8 - Financial Reporting and Review

role of financial report

1. be relevant to the specific area of event management

2. use consistent and comparable figures

3. include recommendations for corrective actions

who uses the financial report

1. tax office - for gst claims

2. client - to track budget progress

3. host organisation - to see the p&l statement

process of budget review

1. monitoring

2. comparing the actual vs budget

3. communicating

4. performance reviews

5. follow up action

6. documenting the cause of deviation

7. administering incentives / disincentives

types of variance

1. materials (total materials cost variance, materials price variance, materials quantity variance)

2. labour (total labour cost variance, labour rate variance, labour efficiency variance)

3. overhead (variable and fixed overhead variance)

why variances happen

incorrect cost estimates, poor planning or mismanagement, equipment failure, labour shortages or disputes, supplier price changes, material shortages

purpose of variance analysis

control event costs, identify and solve problems early, make better financial decisions