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Version 1.0
Prepared by: @Lorraine Sebata
Approved by: @Simon Cooper
Reviewed date: 2025-07-25
Next review date: 2026-07-24
This Budget and Cash Forecast Policy outlines Easyeterms's commitment to establishing and maintaining an adequate budget setting process and consistent cash forecasting procedures. This ensures effective financial control, efficient resource allocation, and proactive management of liquidity in line with the organization’s needs and objectives.
This policy applies to all departments, employees, and management levels involved in the preparation, analysis, modification, and monitoring of budgets and cash forecasts across all business lines and operational activities of Easyeterms.
Budgetary accounting is a management control technique employed to assist in controlling expenses and enforcing revenue restrictions. The organization is committed to having a robust budget setting process in place that aligns with its strategic goals and operational needs.
Regular and thorough budget analysis shall be performed to compare actual financial performance against budgeted amounts. This analysis will identify variances and inform necessary corrective actions to ensure budget compliance.
The budget is a dynamic tool and may require modifications during the course of the year due to significant changes in facts or underlying assumptions. Any proposed modifications shall follow a structured approval process.
Cash forecasts shall be prepared on a consistent basis to effectively monitor and manage borrowings and idle cash. This proactive approach ensures liquidity and optimizes financial resources. The Board of Directors shall be kept informed of the cash status regularly, especially when material shortages or idle cash situations arise. All investments and borrowings of any amount must be approved by the Board of Directors.
Overall responsibility for approving the annual budget.
Responsible for monitoring compliance with the budget.
Responsible for formulating directives to the CEO to ensure budget compliance.
Responsible for making modifications to the budget as needed.
Should be updated of the cash status every Board of Directors meeting, and when shortage or idle cash is material.
Responsible for approving all investments and borrowings for any amount.
Responsible for proposing a budget to the Board of Directors (BOD).
Responsible for administering the budget and ensuring that funds are received and disbursed in accordance with the approved budget (with CFO assistance).
Responsible for monitoring actual revenues and expenses by comparing them against the approved budget (with CFO assistance).
Responsible for keeping the Board of Directors informed of patterns of actual revenues and expenses and their relationship to the budget.
Responsible for recommending actions to the Board of Directors to ensure compliance with the budget or propose modifications if warranted.
Responsible for reviewing cash forecasts.
Responsible for forwarding the quarterly budget analysis, in whole or in summary, to the Board of Directors along with recommended actions, if necessary.
Responsible for collecting the needs from department heads for the operating budget.
Responsible for requesting and receiving all needed information from the Strategic Planning Committee of the BOD.
Responsible for preparing the first draft of the annual budget.
Responsible for submitting the initial budget to the CEO.
Responsible for assisting the CEO in administering the budget.
Responsible for monitoring actual revenues and expenses by comparing them against the approved budget (with CEO assistance).
Responsible for submitting the relationship of actual revenues and expenses to the budget for the CEO, department heads, and staff.
Responsible for recommending actions through the CEO to the department heads and staff to ensure compliance with the budget.
Responsible for preparing budget format, templates, and budget procedures.
Responsible for collecting sub-budgets from different departments and ensuring their accuracy and completeness.
Responsible for preparing detailed budgets (revenues and expenses, capital/investment).
Responsible for preparing the consolidated budget and communicating it to the CEO.
Responsible for providing comments on the budget to department heads for adjustments.
Responsible for reviewing adjusted budgets for completeness and accuracy and delivering them to the CEO.
Responsible for approving the monthly variance report and submitting it to the CEO.
Responsible for identifying key variances against budget and forecasts, investigating reasons, and ensuring corrective measures.
Responsible for communicating variance reports with the CEO.
Responsible for cash forecasts.
Responsible for verifying that cash forecast information is internally consistent, identifying key variances, investigating reasons, and ensuring corrective measures.
Responsible for communicating cash forecast variance reports with the CEO.
Responsible for managing cash accordingly (with Accountant assistance).
Responsible for preparing their departmental budgets based on approved proposals, assumptions, and expectations for the coming year.
Responsible for completing budget assumptions and templates within the stated timetable, considering constraints.
Responsible for adjusting their departmental budgets based on CFO and CEO comments.
Responsible for preparing cash forecasts on a quarterly basis (three months' period).
Responsible for submitting cash forecasts to the CFO on a semi-annual basis.
Responsible for generating information from the accounting system necessary to determine and identify cash sources and collection due dates.
Responsible for generating information from the accounting system related to cash requirements and payment dates.
Responsible for comparing information to prepare cash forecasts and submitting them to the CFO.
Responsible for preparing monthly comparisons between actual and budgeted amounts and submitting them to the CFO.
This policy will be reviewed at least annually, or more frequently if there are significant changes in laws, regulations, business operations, or identified risks related to budgeting and cash management.