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Finance and Accounting
Budgeting and Cost Control
Overview:
Introduction:
All business decision-making involves analyzing situations containing varying degrees of risk. This training program uncovers the essential skills required to understand the processes of budgeting and cost control for better decision-making. From understanding the importance of a well-defined budget process through to the importance of how costs behave so that realistic cost-cutting and budgeting plans can be produced.
Program Objectives:
At the end of this program, participants will be able to:
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Identify the principal factors required to produce a successful business case.
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Develop budgeting and financial skills required for better decision-making.
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Identify sources of financial and business data to support the budgeting process.
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Learn costing and budgeting terminology used in business.
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Master techniques for cost-benefit analysis.
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Learn how to construct profit, cash, and balance sheet plans and budgets.
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Learn how to evaluate variances from plan and identify corrective actions.
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Understand discounted cash flow (DCF) techniques and their application to financial decision making.
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Build and use budgets relevant to your organization.
Targeted Audience:
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Financial Professional.
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R&D Professional.
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General Accounting Professional.
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Business Unit Professional.
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Personnel responsible for entering data into the budget system or training others how to enter information.
Program Outlines:
Unit 1:
The Need for Financial Control in Business:
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Understanding accounting.
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Management accounting versus financial accounting.
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The relationship between business management and financial management.
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How budgeting fits into the bigger picture.
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How cost management improves an organization’s financial position.
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Key aspects of managing working capital.
Unit 2:
Capital Budgeting and Investment Appraisal:
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The time value of money.
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Understanding Appraisal Techniques - Net Present Value (NPV), Internal Rate of Return (IRR), and Payback period.
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Selecting an appraisal technique.
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The use of Sensitivity analysis in evaluating projects.
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Strategic considerations in assessing capital projects.
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Creating an effective Capital Budgeting framework.
Unit 3:
Cost Analysis and Management:
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Understanding cost structure and behavior.
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Costs as a relationship to outputs – cost/volume/price relationship.
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The concept of contribution margin.
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Break-even analysis for planning and control.
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Cost allocation and apportionment.
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Benefit-cost analysis.
Unit 4:
Full Costing, Marginal Costing, and Activity-Based Costing:
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Comparing full and marginal costing.
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Direct and indirect costs in budgeting for decision making.
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Role of costs in pricing strategies.
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Activity-Based Costing (ABC).
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Managing cost control.
Unit 5:
Budget Construction and Control:
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Nature and purpose of budgets for planning and control.
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Types of budgets and budgeting.
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Creating Key Performance Indicators for financial and non-financial performance.
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Building a budget.
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Budgetary control and variance analysis.
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Budgeting for non-financial measures -introducing the Balanced Scorecard.