Budgeting Management Workshop: Managing Budgets Effectively

Budgeting Management Workshop:  Managing Budgets Effectively

OBJECTIVES

• The ability to know what budget points are justified and be able to prove it!
• Instant insight into potential budget problems before you have to live with them
• An understanding of budget types and processes, and how each impacts your operations
• A complete glossary of terms dealing with each aspect of your budget process
• Confidence that your discussions with financial administrators won’t leave you struggling to understand budgeting concepts or terminology
• The tools necessary to meet your budget goals, whatever the economic environment
• The assurance that your budget will cover all your operating needs including surprises – without padding

WHO SHOULD ATTEND?

• Senior personnel
• Supervisor
• Administrator
• Department head
• Key player on any budgeted team
• Purchasing decision-maker

COURSE OUTLINE

DAY 1 – The What and Why of budgeting

• Budgeting and Reporting Overview: So You Want Perfect Analytics
• Getting started: Budgeting is a communication process
• The key benefits of “good” budgeting and the pitfalls of “bad” budgeting
• Essential elements in planning any viable budget
• Know your organization’s budgeting “environment”
• Putting the pieces together: The budget preparation phase – planning is most of the battle
• Monitoring the approved budget: Do more than just “live with it” … succeed with it!
• Administering a Budget
• Budgets are financial statements: How do we use them effectively. What do they tell you about the past … the future?
• Learn how to use them to pinpoint organizational strengths and weaknesses
• The income statement: What does it measure? What is missing from it?
• The balance sheet budget: a measure of health of your department or organization
• Review of days topics

DAY 2 – Administering a budget (Cont’d)

• The capital budget: The long-term commitment of viability. Just how practical are your plans for expansion, research and development, new personnel, etc.?
• The cash budget: The first line of survival
• Spot the key problems and opportunities every budgeting process uncovers
• Essential Budgeting Tools
• Methodology of effective budgeting
• The budgeting checklist
• Unit-cost budgeting: ideal for operations-oriented environments
• Fixed-cost budgeting: the tool budget-builders reach for most often
• Program Planning and Budgeting: A more strategic look at budgeting
• Review the methods available to address your unique budgeting challenges
• Zero-based budgeting: essential for justifying proposed expenditures from the ground up
• Activity-Based Budgeting (ABB): Fad or Fact?
• Review of days topics

DAY 3 – Analyzing budget ‘types’

• The final plan: sales plan, production plan, purchases budget, Labor budget, Operating expenses, Capital budget
• The sales plan begins with P X Q
• How to prepare a production budget
• Prepare a manufacturing budget including: budgeting for materials, direct labour and overhead
• How to plan and prepare a research and development budget
• Budgeting terms made simple; a glossary of words you’ll use again and again
• Review of days topics

DAY 4 – Building the budget

• It all begins with sales or revenues
• Where do revenues come from?
• Where do the pieces fit? Capital expense or operating expense?
• Examine capital expenditure requests
• Methods of economically evaluating capital expenditures and projects
• Controlling general and administrative expenses
• Develop unit indicators for budget preparation and control
• Identify overhead and determine proper allocation methods
• Budget Development
• “Cash” versus “accrual” accounting – why are they different?
• What are the “rules” for budgeting and who makes them?
• Use basic accounting technology to properly compare cash inflow to outflow
• Post approval, what steps to undertake after the budget is approved
• Top down or Bottom up? Which one works and why
• Management by Objectives, results that matter
• Review of days topics

DAY 5 – Budget variances

• Is the alleged variance within your control? What are some factors beyond your control? The right perspective will make the difference
• Learn where to look first for variance factors hardest to find
• How to know when and how your budget is warning you of outside interference
• Tips on how to respond to requests for variance explanations
• Monitoring the Budget
• Monitoring methods such as Management by Exception
• Understand the difference between fixed, variable and semi-variable costs using a simple but effective illustration
• Expect the unexpected: some costs simply can’t be budgeted – recognize them and incorporate them
• Learn and use the unit-cost concept immediately and effectively
• Establish and track monthly targets within your annual budget
• When to “break” the budget
• Bringing it all together – Analyzing the week