Effective Budgeting & Cost Control

SUITABLE FOR:

Professional staff, Managers and Supervisors from finance departments who need to develop their knowledge of the management of business finance and who have a basic understanding of accounting principles.

OBJECTIVES:

By the end of the course, delegates will:

• Have an understanding of the basic financial principles underlying business operations
• Understand how financial information is used to make business decisions
• Have an understanding and be able to apply various budgeting techniques
• Be able to understand effective business forecasting
• Be able to accurately interpret company accounts
• Be able to prepare cash budgets and undertake cash flow planning and control
• Have developed their skills in evaluating capital expenditure projects

SUMMARY:

All Professionals, Managers and Supervisors in business operations need to understand how financial decisions are made. This course extends these principles and will give delegates an understanding of how and why business decisions are made based upon financial information. It will help delegates to interpret the financial data you receive and assist you in making your own commercial decisions.

The topics covered will include:

Day One

• Introduction to budgeting, cost estimation & control
• The difference between a target, a budget and a forecast
• Benefits of budgetary control
• Cost estimation and standard
• The concept of contribution
• Relevant costing for decision making
• Cost classification and behaviour
• Budgeting principles and objectives
• Management involvement in budgets and standards
• Cost, profit or investment centres

Day Two

• Participation in budgeting
• How budgetary tools and techniques are being developed to fit with current business requirements
• Cost-volume-profit analysis
• The budgetary process checklist
• Budgetary slack
• The importance of effective business forecasting
• Applying budgetary and forecasting for greater business benefit
• Linking budgeting and forecasting to the wider disciplines of strategic and operational planning and consequently to performance measurement

Day Three

• Activity Based Costing (ABC)
• Activity Based Budgeting (ABB)
• Zero-based budgeting techniques (ZBB)
• Budget preparation and Monitoring procedures
• Variance analysis and investigation
• Risk Management and budgeting

Day Four

• Preparation of cash budget
• Cash flow planning and control
• Distinction between profit and cash
• Interpretation of accounts
• Break-even models
• The published profit and loss account
• Exercise

Day Five

• Budgeting capital expenditure
• Case study
• Techniques for evaluating capital projects:
  • Net Present Value
  • Payback method
  • Discounted cash flow method
  • Sensitivity analysis