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.

Program Objectives:

At the end of this program, participants will be able 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.

• Master techniques for cost-benefit analysis.

• Construct profit, cash, and balance sheet plans and budgets.

• Evaluate variances from plan and identify corrective actions.

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

• Build and use budgets relevant to your organization.

Targeted Audience:

• Financial Professional.

• R&D Professional.

• General Accounting Professional.

• Business Unit Professional.

• 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: 

• Understanding accounting.

• Management accounting versus financial accounting.

• The relationship between business management and financial management.

• How budgeting fits into the bigger picture.

• How cost management improves an organization’s financial position.

• Key aspects of managing working capital.

Unit 2:

Capital Budgeting and Investment Appraisal: 

• The time value of money.

• Understanding Appraisal Techniques - Net Present Value (NPV), Internal Rate of Return (IRR), and Payback period.

• Selecting an appraisal technique.

• The use of Sensitivity analysis in evaluating projects.

• Strategic considerations in assessing capital projects.

• Creating an effective Capital Budgeting framework.

Unit 3:

Cost Analysis and Management: 

• Understanding cost structure and behavior.

• Costs as a relationship to outputs – cost/volume/price relationship.

• The concept of contribution margin.

• Break-even analysis for planning and control.

• Cost allocation and apportionment.

• Benefit-cost analysis.

Unit 4:

Full Costing, Marginal Costing, and Activity-Based Costing: 

• Comparing full and marginal costing.

• Direct and indirect costs in budgeting for decision making.

• Role of costs in pricing strategies.

• Activity-Based Costing (ABC).

• Managing cost control.

Unit 5:

Budget Construction and Control: 

• Nature and purpose of budgets for planning and control.

• Types of budgets and budgeting.

• Creating Key Performance Indicators for financial and non-financial performance.

• Building a budget.

• Budgetary control and variance analysis.

• Budgeting for non-financial measures -introducing the Balanced Scorecard.