Effective Budget Preparation Skills Event, 12.Jan.2025

Introduction

Budget Preparation is one of the major imporatant activities for any commercial or non - commercial entity. Budgeting enables the organization to have a plan for future expenditures that can easily be compared to the actual ones. Hence budgeting serves both a planning and a control tool. Budget preparation requires a set of skills and thorough professional knowlege in order to ensure that the drifting process proves succesful in the future.

Course Objectives of Effective Budget Preparation Skills

• Learn Costing and Budgeting Terminology used in Business
• Understand the Importance of a Well-Defined Costing and Budgeting Process
• Determine Full Costs of Outputs for the Goods and Services provided
• Master traditional Techniques and recent Best Practices
• Link Finance and Operation for Budgeting Purposes and Strategy Execution
• Learn How to Build a Comprehensive Performance Measurement System 

Effective Budget Preparation Skills Course Outlines

Day 1
BUDGETING AND ITS ROLE WITHIN THE MANAGEMENT PROCESS

• The Role of Budgeting within Management Accounting
• Linking Costing and Budgeting to Strategy and Performance Measurement
• The Process of Value Creation: Implications for Budgeting
• What is a Budget and Why Costing is Fundamental?
• Budgets - The Financial Expression of the Operating Plan
• Linking Financial and Operational Issues
• Behavioural Implications of Budgeting
• Case Discussion and Examples

Day 2
COSTS ANALYSIS FOR BUDGETARY PURPOSES

• Costing for Budgeting: Why?
• Cost Terms and Purposes
• Fixed and Variable Costs
• Cost, Volume, Profit (CVP) Relationships
• The Key Concept of Contribution Margin
• Direct and Indirect Cost – The Allocation Problem
• Traditional Methods vs. Activity Based Costing (ABC)
• Case Discussion and Examples

Day 3
THE FRAMEWORK FOR BUDGETING

• Elements of the Budgeting Framework
• Key Concepts and Terminology
• Advantages and Disadvantages: Critical Issues to be Discussed
• Overview of the Financial Statements
• Balance Sheet, Income Statement, and the Statement of Cash Flows
• Introducing Cost Analysis for Decision-Making
• The Importance of Understanding Full Costs
• Case Discussion and Examples

Day 4
FLEXED BUDGETS AND VARIANCE ANALYSIS

• Budgeting for Management Control Purposes
• Explain Why Standard Costs are used in Variance Analysis
• Describe the difference between a Fixed Budget and a Flexed Budget
• Compute Flexed Budget Variances and Sales Volume Variances
• How to Interpret Variance Analysis?
• Integrate continuous improvement into Variance Analysis
• Is Budgeting Enough?
• Case Discussion and Examples

Day 5
BEYOND BUDGETING: BROADENING PERFORMANCE MEASUREMENT SYSTEMS

• Shortcomings of Traditional approaches to Budgeting and Measurement
• Linking Financial to Operational Issues
• Linking Strategy to Performance Measurement
• The Balanced Scorecard and Six Sigma
• Financial Perspective
• Customer Perspective
• Internal Business Process Perspective
• Learning and Growth Perspective
• Developing and Adapting the Scorecard
• Case Discussion and Examples