Effective Budgeting, Planning & Control Training
Finance & Accounting
Introduction:
Budgets are an essential financial tool, aiding in budget planning and control, decision-making, resource allocation, coordination, and control.
Without the necessary skills, budgets in planning and control can be poorly prepared and implemented, leading to suboptimal decisions, misuse of vital resources, poor coordination, and a lack of control—or even too much control, resulting in missed opportunities.
In this effective budgeting and operational cost control course, participants will learn about the pivotal role of budgeting in planning and controlling, including its use as a tool for financial management.
Course Objectives:
At the end of this budget management training course, the participants will be able to:
Develop the skills to Plan Budgets within a sound Strategic Plan.
Develop the skills to Prepare Budgets using:
Appropriate Forecasting Techniques, including Time Series Models
Exponential Smoothing
Regression and Correlation Analysis and
Costing Methods such as Activity Based Costing
Develop the skills to implement Budgets effectively.
Become aware of the problems/limitations of budgets and the conditions required for their success.
Integrate the budgeting process with developing the company's long-term strategic vision.
Identify key performance indicators for effective and focused decision-making.
Perform a What-If and Sensitivity Analysis to evaluate the implications of changes in significant factors of production and consumption.
Recommend various courses of action to manage the impact of What If and Sensitivity Analysis.
Implement advanced budget planning and control process techniques.
Develop the skills to Manage and control the budgeting process effectively.
Course Content:
DAY 1:
Strategic Planning, Forecasting, Budgeting, and Costing – Defined
The inter-relationship of Strategic Planning, Forecasting, Budgets in planning and control
The Benefits & Limitations of Budgets and the Essential Features & Conditions Required
An Evaluation of Various Types of Budgets
Fixed
Variable
Zero Based
Activity-Based
Capital Budget
The Essential Features of Activity-Based Budgeting
Developing the ABB application model
Budgeting for Processes rather than Departments
Defining Key Cost Drivers
Defining Key Activities
Development of ABB Cost Standards
Developing the Activity-Based Budget
Preparing The Master Budget using Excel
Sales Budgets
Production Budgets
Cash Budgets
Capital Budgets
The Master Budget
DAY 2:
Determine the Purpose or Objective of Forecasting
Methods of Forecasting Using Qualitative and Quantitative/Statistical Analysis
Including the Exploratory Data Analysis Tools Available in Excel:
Their Use & Limitations
Recognizing the Basic Patterns Inherent in Historical Data
Time Series Analysis
Exponential Smoothing
Correlation and Regression Analysis
Presenting initial forecasts to decision-makers
Forecasting future Market/Sector developments using Qualitative Analysis – SWOT Analysis and LEPESTE & Co Analysis
Implementing Forecasts into the Budget Control Plan
Considering Hedging Strategies where variables such as Exchange Rates and Interest Rates cannot be forecast accurately
Forwards, FRAs, Futures, Options, and Swaps
DAY 3:
Preparing the Sales Budget
Determining the price, credit policy, discount policy, and currency
Preparing the Production Budget
Preparing the Cash Budget
Make finance and investment decisions.
Preparing Capital Budgets
Use Excel to evaluate various Capital Projects using the Present.
Value, Future Value, Net Present Value, Internal Rate of Return, Modified Internal Rate of Return, and Discounted Payback models
An Introduction to What If and Sensitivity Analysis to evaluate the implications of changes in significant factors of production and make strategic decisions
Implementing Budgets Successfully
The Conditions Required
The Management Skills Required
DAY4:
Break-even analysis, Cost Behavior, and Sensitivity Analysis
Identifying Fixed, Variable, and Semi-variable costs
Identification of the level of sales/profit to break even
Identification of critical costs
Determining resource requirements
What if Analysis using Excel and leading software
Performing What-If and Sensitivity Analysis to evaluate the implications of changes in significant factors of production and consumption on the Cash Budget and Profit and loss Account
Identification of key performance indicators for effective and focused decision-making
Recommend various courses of action to manage the What If and Sensitivity Analysis implications.
Developing Budget Re-Projection and Best Case / Worst Case Scenario Models
Planning for contingencies
Developing various scenarios
Using the Scenario tool in Excel® to explore the variable sets of assumptions while tracking the impact on the base model.
Building the financial simulation model using probabilistic (Monte Carlo) simulation
Making the economic simulation model using deterministic simulation
DAY 5:
Accounting Systems, Accountability, and Responsibility Systems
Essential Elements of a Costing System
Establishing and Implementing a Costing System
Undertaking Variance Analysis and Presenting a Variance Report to decision-makers
Evaluation of the results
Making Strategic Decisions based on the Variance Report/Business Planning