Introduction to an administrative plan
It is difficult for the owner/s of a business to
run all the business activities by themselves.
Therefore they need various human resources
for the business. The administrative plan is the
document that contains the information and
cost estimates regarding the human resources
that a business needs. It also describes the
functions, responsibilities and authority of
each person involved in the business.
The following information is included in an administrative plan.
# Administrative positions and functions.
# Employee salaries and wages.
# Other administrative expenditure.
# Administrative fixed assets.
Now let us discuss each of these in detail.
Administrative positions and functions
A business organization consists of various divisions to handle its different activities
related to production, marketing, finance, administration, etc. and there are many
positions that come under each of these divisions. It is the administrative plan that
gives information on these positions in the business organization: the functions
and responsibilities assigned to each position and the qualifications required. An
organizational chart can be used to indicate the divisions of a business organization
based on its functions, as well as the various positions in the organization and their
hierarchy.
Employee salaries and wages
The administrative plan should present an estimate of all the payments that will be
made to the people holding various positions in the organization. If the owner/s of
the business also perform some work and they have to be paid for it, those payments
should also be included in the plan.
Other administrative expenses
Apart from salaries and wages, if there are any other expenses related to the administrative
functions of the business, they should be included in the estimate of expenditure.
The following are some examples for expenses which are related to the administrative
functions.
Rental for buildings, telephone charges, stationery expenses, maintenance of
administrative fixed assets repair and depreciation, office electricity charges, postal
charges, etc.
Administrative fixed assets
There are fixed assets which are directly related to the administrative functions of a
business, such as buildings and installations, office equipment, etc. The depreciation
of these assets should be calculated based on their value and lifetime, and it should
be indicated as an administrative expense.
