Key Budget Factor for a Construction Company

Key figure Factor for a social structure ships company Master Science in Facilities Management Faculty of computer architecture, Planning and Surveying University technology MARA, Shah Alam, Malaysia ____________________________________________________________________________ Abstract Construction companies generally have a variety of objectives designed to maintain and succeed in their business. They will in addition do a lot of effort to maximize profits for their companies but with minimum capital.Some companies are come to about how management including budget management because from there they can manage their companys monetary success and merely profit. This paper will be discussed about the key part for a construction company in Malaysia. The purpose of this discussion is to find out the key factors that should be considered in budget management by construction companies throughout Malaysia. Keyword Construction Company, key budget factor, Malaysia ____________________ _____________________________________________________________________________________ 1. IntroductionBudget is very comprehensive it is a formal project that estimates the likely revenues and expenses for a company in a particular period. Budget preparation explains the whole touch and use the budget more effectively. Budget management is very important especially for construction companies to examine that projects run smoothly implemented in line with the companys capital. agree to Chan and Chan (2004), the construction industry is dynamic in nature and its environment has become more dynamic due to increasing uncertainties in technology, budgets and development process.Besides that, match to Churchill (1997) accentuates the fact that businesses must understand the pressure to grow so that they can plan and prepare for it, withdraw the right timing for expected major changes in size and control the speed of growth. 2. Key Budget Factor for a Construction company throughout Ma laysia The budget is used in construction turn tail to determine the amount of liquid cash that will be required over the various periods of a contract, as a measurement against which actual progress can be measured.The budget is a financial forecast and important tool of management, in as much as trading position of a construction company can be establish by having budgets for all of the work on hand. According to FOA Corporate (1997), key budget factor also known as principal budget factor or limiting budget factor and is the factor which will limit the activities of an undertaking. This limits output such as gross gross sales, material or labour. Among the key factors for the companys construction budget is as follows i. Sales budgetThis involves a realistic sales forecast. This is prepared in units of each product and also in sales value. Methods of sales forecasting accept sales force opinions, market research, and statistical methods (correlation analysis and examination o f trends) mathematical models. Sales budget includes companys price policy, general economic and political conditions, changes in the population, competition, consumers income and tastes, advertising and other sales promotion techniques, after sales service, and credit terms offered. i. Production budget Expressed in quantitative terms only and is accommodate to the sales budget. The production managers duties include two things which are analysis of plant utilization and work-in-progress budgets. If requirements exceed qualification the production manager may subcontract, plan for overtime, introduce shift work, hire or buy additional machinery and the materials purchases budgets twain quantitative and financial. iii. Raw materials and purchasing budgetThis factor includes the materials usage budget is in quantities and the materials purchases budget is both quantitative and financial. Factors influencing included production requirements, planning stock levels, storage space, a nd trends of material prices. iv. ram budget Labour budget is both quantitative and financial. This is influenced by production requirements, man-hours available, grades of labour required, wage rates (union agreements), and the need for incentives. v. coin budget A cash plan is to defined period of time.It cans summaries monthly receipts and payments. Besides that, it highlights monthly surpluses and deficits of actual cash. Its main uses are to maintain control over a firms cash requirements such as stock and debtors, to enable a firm to take precautionary measures and arrange in advance for investiture and loan facilities whenever cash surpluses or deficits arises, to show the feasibility of managements plans in cash terms, to illustrate the financial squeeze of changes in management policy, e. . change of credit terms offered to customers. REFERENCE 1. Agriculture and consumer Protection by FAO embodied DOCUMENT REPOSITORY 2. Chan APC, Chan APL (2004). Key performance indica tors for measuring construction success, Benchmark. Int. J. , 11(2) 203-221. 3. Churchill CF (1997). Managing Growth The Organizational Architecture of Microfinance Institutions. ACCI on International. http//www. ebook-search-engine. com/organization-growth-ebook-all. html.