Budgeting & Cost Control

Budgeting & Cost Control

OBJECTIVES

• Successfully build an integrated planning, budgeting and reporting process
• Understand costs behavior more accurately
• Deliver more timely and useful information to decision makers
• Understand capital budgeting
• Identify & manage key financial indicators for the business
• Be able to use specific cost analysis and performance measurement techniques
• Be able to understand and implement the Balanced Scorecards
• Be able to interpret the financial impact of strategic directions
• Understand the problems of overheads allocation and how Activity Based Analysis may aid decision-making and pricing strategies
• Select the performance measurement systems that work
• Be able to perform and interpret variance analysis
• Think proactively beyond budgeting

WHO SHOULD ATTEND?

• Financial Planning and Control Staff involved in the performance of a business unit, division or an organisation as whole
• Professionals with direct or indirect financial responsibilities
• Personnel from every business discipline and department who have to run departments and budgetary plans, and who are responsible for cost and strategic analysis
• Professionals from all sectors of industry, irrespective of functional responsibilities, but particularly those involved in manufacturing, production, engineering or sales
• First appointment professionals on fast-track development programmes
• Professionals who require a programme on the topic or who would benefit from having an opportunity to consider new ideas and methods
• Professionals working in a project management environment

COURSE OUTLINE

THE ROLE OF BUDGETING & CONTROL

• The complexity of managing contemporary organization: value creation
• Budgeting and management control systems
• Management Accounting for organizational control systems
• Understanding the context for budgeting & the role of the controller
• The Budget and its role for achieving organizational targets
• What is it the situation in your organization? How to improve it?

COSTING: FROM TRADITIONAL TO ACTIVITY-BASED

• Costing for budgeting: key terms and concepts
• Inventoriable vs. period costs
• Manufacturing vs non-manufacturing costs
• Variable vs. Fixed costs
• Direct vs. indirect cost
• Cost allocation: traditional costing and activity-based costing (ABC)
• From traditional budgeting to Activity-based budgeting (ABB)
• Cases, problems and examples

DEVELOP FLEXIBLE BUDGETS & PERFORM VARIANCE ANALYSIS

• Define the master budget and explain its major benefits to an organization
• Describe the difference between a static budget and a flexible budget
• Compute flexible-budget variances and sales-volume variances
• Compute the price and efficiency variances for direct-cost categories
• Explain why standard costs are often used in variance analysis
• Integrate continuous improvement into variance analysis
• Cases, problems and exercises

CAPITAL BUDGETING

• Capital budgeting
• Payback period
• Net-present value
• Internal rate of return
• Interpreting budgetary information in light of Value Creation
• Problems and Exercises

BEYOND THE BUDGETS: TOWARDS VALUE-BASED BUDGETING

• What is the scope of budgeting? How far should it extend beyond cost budgeting?
• Should we budget for customer satisfaction and staff skills?
• The budgets and performance measurement as tools for communications
• Budgets and issues of motivation
• Beyond budgeting: integrating financial and non-financial issues
• The balanced scorecard
• Case, problems and examples