Administrative Plan

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.


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