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