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