The managers most likely to succeed in today’s business environment are those who understand how to use budgets as business tools for company, departmental and personal success.
3 Steps of analysis you need to undertake when building budgets.
1. Analyse the context of the evolving industry, world, and corporate strategy.
- Budgeting is not just about your plans, but your plans put into context with corporate strategy, the changing industry, and the world around us.
- Use environmental analysis techniques to become more productive.
- Use industry and competitive analysis techniques to keep pace with what the industry is doing.
- Understand the value chain of your organisation and where key budgets should be assigned to.
- Understand that budgeting is about target settings, therefore your strategy.
2. Analyse your budget requirements and understand the “fit” with corporate budgeting.
- Understand how corporate budgeting works and how your budget fits in the whole framework to make better business decisions.
- Learn how your budget contributes to the overall profits and meeting strategic objectives.
- Learn which techniques to employ, the challenges, and what to incorporate into your budget.
- Decide on incremental, zero-based or rolling based budgeting.
- Understand that budgeting is the most important process in the organisation to ensure profitability.
- Budgeting should not be seen in isolation but in conjunction with all managers and corporate objectives.
3. Analyse and decide on a cost management structure and use your budget as a performance evaluation tool.
- Use your budget as a performance measurement instrument.
- Learn that your costs can be optimised and viewed from different perspectives.
- Agree on direct and indirect costs and maintain these regularly.
- Understand that these costs form the basis of price settings.
- Decide on fixed versus variable costs and build a flexible business model.
- Optimise the breakeven point, the point when products and projects become profitable.
The learning outcome
By the end of this 1-day training course, you will have understood the role and principles of budgeting. Have confidence in using budgeting tools and techniques and have learned how to create budgets, understand budgeting terminology and learn how to analyse budgets.
It covers in detail how the tools and techniques of successful budgeting and budgetary control are applied within the overall planning framework to ensure that organisational goals are met.
You will learn about:
- Strategic planning, budget setting, performance measurement
- Full costing, marginal costing, and activity-based costing (ABC)
- Operating budgets, cash budgets, capital budgets, and master budgets
- Fixed budgets, flexed budgets, and variance analysis
- Continuous performance improvement
- Learn to think strategically and prepare successful financial plans and budgets and determine the financing requirements of the organisation
- Comparing fixed and variable costs, direct and indirect costs, and the use of contribution accounting.
- Use the appropriate techniques of forecasting sales and costs, and sales pricing, and preparation of departmental budgets, the master budget, and cash budgets.
Recommended background
This course provides training for budgeting managers and anyone who contributes or needs to evaluate budgets and forecasts. No entry requirements are needed.
Course format (Residential and Online)
This course will be taught using a combination of formal instructions, combined with practical and interactive exercises and case studies used to reinforce the concepts taught in each section of the course. Case studies include critique of conventional budgeting techniques, real-world examples of problems and best practice guidelines.
Practice-based learning and critical engagement is a key theme through all our courses allowing delegates to acquire the needed skills and techniques to be applied as soon as they are learned and developed.
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