Effective Budgeting and Cost Control Workshop

Why Attend

Planning and budgeting are must-have skills for all professionals regardless of their function or
managerial level. This course covers the concept of budgeting as a planning tool, a financial device
and a control mechanism. In addition, it provides the necessary application of a long and short-term
planning decisions.

Event Date: –

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Overview
Course Outline

Course Methodology
This course focuses on exercises, case studies, and individual and group presentations.
Course Objectives
By the end of the course, participants will be able to:
 Defend the importance of linking an organization's budget with its strategic plan
 Demonstrate how the budget relates to the key financial statements: balance sheet, income statement, and cash flow
 Prepare the key elements of an operating and capital budget and evaluate the different budgeting approaches used
 Apply cost control tools, analyze management variance reports and take proper corrective action
 Calculate different capital budgeting evaluation techniques as included in a capital expenditure proposal
 Utilize cost-volume-profit analysis in making budgeting decisions
Target Audience
All managers, supervisors and analysts who prepare or use management budgets.
Target Competencies
 Interpreting Financial statements
 Planning and budgeting
 Cost control
 Capital budgeting
 Applying cost-volume-profit analysis
 Utilize breakeven analysis

Key Course Outline
DAY 1
 Planning and the functions of management
 The critical functions of management
 Aligning the budget with the organization’s strategy
 Road map to strategy
 Budget as a planning tool
 Control: the missing link
 Planning pitfalls
 The key financial statements
 The accounting system
 The income statement
 The balance sheet
 The cash flow statement
 Budgeting: process and approaches
 The advantages of budgeting
 The budget process
 Rolling budgets
 The master budget
 Operating and capital budgets
 The budgeted financial statements
 Approaches to budgeting:
 Incremental budgeting
 Zero based budgeting
 Flexible budgeting
 Kaizen budgeting and continuous improvement
 Activity based budgeting
 Tools of forecasting
 Direct and indirect costs
 Characteristics of an effective budget
 Problems in budgeting
DAY 2
 Cost control
 Budget as a control tool
 The control process
 Characteristics of an effective control system
 Responsibility reporting
 Variance analysis: identifying the components of variance
 Variance analysis: taking the corrective action
 Capital expenditure budgeting and analysis
 Time value of money
 Simple versus compound interest
 Identifying and analyzing cash flows
 The discount rate: using cost of capital
 Net Present Value (NPV)
 Internal Rate of Return (IRR)
 Profitability Index (PI)
 Pay-Back Period (PBP)
 Accounting Rate of Return (ARR)
 Approval for Expenditure (AFE)
 Sensitivity and risk analysis
 Cost-Volume-Profit analysis (CVP)
 Identifying the fixed costs and variable costs
 Computing breakeven point in units
 Computing breakeven point in sales
 Assumptions of CVP analysis
 Using CVP in budgeting decisions