Budgeting, Forecasting and the Planning Process

Course details

Decision-making is a messy process using available data that may contain ambiguities and errors. It is important to know how costs behave so that realistic budgets and plans can be produced and appropriate financial resources made available. 

This seminar will challenge you to:

• To identify the key ingredients in producing a successful financial business case
• To give you the budgeting/financial skills required for better decision-making, whether for your continuing business or project or a new business venture
• Identify sources of financial and business data that provide insights into business and financial strategies when converted to budgets

• To identify the key ingredients in producing a successful financial business case
• To give you the budgeting/financial skills required for better decision-making, whether for your continuing business or project or a new business venture
• To explain typical costing and budgeting terminology used in business
• How to construct profit, cash and balance sheet plans/budgets.
• Evaluate variances from plan and identify corrective action
• Understand discounted cash flow (DCF) techniques and their application to financial decision-making including risky scenarios
• Identify sources of financial and business data that provide insights into business and financial strategies when converted to budgets
• Enhance personal networks of similarly minded high potential managers

• Understand different types of costing and their relevance to decision making
• Understand the different types of budget - cash, operational and capital
• Master techniques for cost benefit analysis
• Understand the need for and method of sound, rigorous investment and capex appraisal
• Understand the importance of a well-defined budget process - the budget philosophy through to preparation and its use in controlling the business
• Understand the problems of overheads and how Activity Based Costing may aid decision-making and pricing strategies
• Place cost accounting and shareholder value into an integrated picture (Balanced Scorecard) of the business, project, venture, or other unit

• Encourages best and brightest managers to stretch themselves integrating budgeting and strategy
• Provides opportunities for testing key assumptions of corporate/financial strategy within the budget process
• Enhances organizational networks by developing and using the common language of business for resource allocation and performance assessment
• Builds practical problem solving skills for immediate use including spreadsheets and model building
• Improves recognition and implementation of financial management principles in budgeting and cost accounting

• Personal life-long learning philosophy enhanced and clarified
• Permits testing of financial impact of strategic direction
• Builds financial and analytical skills in a complex and changing environment
• Increased self-confidence with a higher level of humility (emotional intelligence) regarding financial relationships
• Long lasting relationships built for future conversations and sounding boards

• What is accounting? Is budgeting broken?
• Management accounting and financial accounting: differences and similarities
• Cost terminology: variable, fixed, controllable, non-controllable, incremental, sunk, opportunity, and relevant
• Cost behaviors in Cost-Volume-Profit scenarios: contribution margin and fixed costs
• Breakeven and targeted net income scenarios
• Business cases with master budgets
• Benefit-cost analysis

• Ideas for the future with a multiple time periods horizon
• Estimating cash flows within the business system
• Net present value and IRR as superior methods to payback and accounting rate of return
• Defining the approval criteria and review process
• Post-implementation audits of capital projects
• Sensitivity analysis and uncertainty
• Using Monte Carlo simulation techniques in budgeting

• Identifying relevant costs in complex decisions
• Complex applications of C-V-P analysis
• Change selling price, variable costs, fixed costs, and all simultaneously
• Multiple products/services C-V-P
• Evaluating C-V-P before and after implementation
• Special sales orders and/or segment analysis
• Sell or process further
• Make or buy decisions

• Comparing full and marginal costing with or without standard costs
• Direct and indirect costs in budgeting for decision making
• Role of costs in pricing strategies
• Overhead allocation methods and difficulties
• Variance analysis of materials, labor, overhead in manufacturing and services
• Activity Based Costing (ABC) in manufacturing and services
• Using cost accounting as a 'truth' device for decision making

• The budgeting process as a communications process
• Nature and purpose of budgets for planning and control
• Constructing "good" budgets that are integrated via the master budget to the strategy
• Budgetary control and variance analysis
• Price and volume effects within variance analysis: state of the art
• Responsibility centers: cost, profit, and investment
• Measuring responsibility center performance