.5 - Complete a new budget based on your recommendations.

Proactive Management Consultants

Proactive Management Consultants Pty Ltd (PMC) are a small service organisation that provide consultative services to a wide variety of clients and have been in existence for just over five years. Typically, they advise their clients on professional development opportunities, organisation structure and simple training initiatives.

While the past 12 months have been profitable for PMC, they face a very uncertain future. Reducing government support, the global financial crisis, an increasingly competitive market and a client base that already believes they are already paying too much.

PMC prides itself on the advice they give their clients, however, finance has never been their strength. The PMC Board has approached your company to provide monthly financial reports and recommendations on how they should proceed with their financial plans.

PMC has provided each month's sales and expenditure data from which they require your company to complete the reporting in the templates provided, interpret the data and provide recommendations.19

Accounts payable are entirely paid month-to-month. Accounts receivable are calculated at 60% current month, 30% last month, 10% second to last month - actual May sales - $42,100; actual June sales - $47,300. These figures will be required to determine actual sales receipts for July and August.

PMC has also provided you with a list of initiatives they had planned to undertake over the next six months. They have budgeted for these in their financial planning and they need you to consider them in your recommendations.

They are:

a. Anticipate large invoicing month in July due to number of leads.

b. All company motor vehicle registrations and insurance are due in July, $18,000.

c. 15th August moving to new premises whereby rent increases to $3,500 per month.

d. To increase productivity PMC will upgrade all computers under expensed equipment in September at $12,000.

e. Have sought an aggressive advertising campaign in October to invigorate lost clientele, $16,000.

f. Due to advertising campaign, PMC are recruiting two new consultants in October. This will add 30% to November and December's payroll and $10,000 in recruitment and training during October. It will also result in increased business (40% November and December).

g. Purchasing a licence to deliver an innovative training program in November for $20,000. Have contractual agreements in January and February that will generate $32,000 in sales.

h. Three employees on annual leave will have 50% impact on sales in November.

i. Conducting a professional development week for all staff in December, $18,000.

j. Employee bonuses due in December, anticipate $16,000.