PROGRAM'S BACKGROUND

All business decision-making involves analyzing situations containing varying degrees of risk, and the available data may be erroneous containing ambiguities and errors. It is important to understand how costs behave so that realistic plans can be produced and appropriate financial resources made available. 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. In this program you will learn how to:

›       Identify the principal factors required to produce a successful business case

›       Develop budgeting and financial skills required for better decision-making

›       Identify sources of financial and business data to support the budgeting process

›       Learn new techniques and methodologies to simulate typical business scenarios

PROGRAM'S OBJECTIVES

This Program’s Attendees Will Be More Able To:

›       Understand the importance of a well-defined budget process

›       Understand stages in the planning process

›       Learn costing and budgeting terminology used in business

›       Master techniques for cost-benefit analysis

›       Learn how to construct profit, cash and balance sheet plans and budgets

›       Learn how to evaluate variances from plan and identify corrective actions

›       Understand discounted cash flow (DCF) techniques and their application to financial decision making

›       Identify the key ingredients in producing a successful financial business case

›       Learn about the budgeting/financial skills required for better decision-making

›       Explain typical costing and budgeting terminology used in business

›       Use and build EXCEL spreadsheets for financial analysis

›       Learn planning, costing and budgeting terminology used in business

PROGRAM'S ATTENDEES

›       Financial personnel who need to evaluate plans for approval and variance reports for corrective action and those who need to improve their skills in constructing and controlling a budget

›       Anyone from non-financial discipline, needing to evaluate proposed business expenditure decisions and who need to know more about the budgeting process, plan, cost and budget during their business careers

›       Staff who need to know more about business budgeting and costing terms and techniques to improve their communication with accounting colleagues

›       Anyone from non-financial disciplines that needs to know how to financially evaluate proposed business expenditure decisions

›       Managers who need to improve their skills in constructing and controlling their budget

PROGRAM'S OUTLINE

BUDGETING BASICS

›       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

›       Benefit-cost analysis

CAPITAL BUDGETING

›       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

MULTI-DIMENSIONAL BUDGETS

›       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

›       Make or buy decisions

OVERHEAD BUDGETS & FLEXIBLE BUDGETS

›       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

MASTER BUDGETS & BEYOND

›       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

›       Responsibility centers: cost, profit, and investment

›       Measuring responsibility center performance

THE NEED FOR FINANCIAL CONTROL IN BUSINESS

›       Understanding accounting

›       Management accounting versus financial accounting

›       Cost behaviors in Cost-Volume-Profit scenarios

›       Breakeven and targeted net income scenarios

›       Business cases with master budgets

›       Benefit-cost analysis

CAPITAL COSTS & INVESTMENT APPRAISAL

›       Estimating cash flows within the business system

›       Understanding Net Present Value (NPV) and Internal Rate of Return (IRR)

›       Defining the approval criteria and review process

›       Post-implementation audits of capital projects

›       Sensitivity analysis and uncertainty

›       Monte Carlo simulation techniques in budgeting

COST VOLUME PROFIT ANALYSIS

›       Identifying relevant costs in complex decisions

›       Complex applications of analysis

›       Multiple products and services

›       Evaluating before and after implementation

›       Special sales orders and segment analysis

›       Make or buy decisions

FULL COSTING, MARGINAL COSTING & ACTIVITY BASED COSTING

›       Comparing full and marginal costing

›       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, and overhead in manufacturing and services

›       Activity Based Costing (ABC) in manufacturing and services

BUDGET CONSTRUCTION & CONTROL

›       Budgeting as a communication process

›       Nature and purpose of budgets for planning and control

›       Budgetary control and variance analysis

›       Responsibility centers: cost, profit and investment

›       Segment reporting internally and externally 

ADDITIONAL DETAILS