Budget Preparation Skills

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

• Behavioral implications of budgeting

• Case discussion and examples

DAY 2

The Framework for Budgeting

• Elements of the budgetary framework

• Key concepts and terminology

• Advantages and disadvantages: critical issues to be discussed

• Overview of the financial statements

• Balance sheet, Income statement and cash-flow statement

• Introducing cost analysis for decision making

• The importance of understanding full costs

• The importance of understanding full costs

• Case discussion and examples

DAY 3

Costs Analysis for Budgetary Purposes

• Costing for budgeting: Why?

• Cost terms and purposes

• Fixed and Variable costs

• Cost, profit and volume relationships

• The key concept of contribution margin

• Direct and indirect cost – the avocation problem

• Traditional methods vs. Activity-based costing

• Case discussion and examples

DAY 4

Flexible Budgets and Variance Analysis

• Budgeting for management control purposes

• Describe the difference between a static budget and a flexible budget

• Compute flexible-budget variances and sales-volume variances

• Explain why standard costs are often used in variance analysis

• How to interpret variance analysis

• Integrate continuous improvement into variance analysis

• Case discussion and examples

• Is budgeting enough?

DAY 5

Beyond Budgeting: Broadening Performance Measurement Systems

• Shortcomings of traditional approaches to budgeting and measurement

• Linking financial to operational issues

• The Balanced Scorecard and Six-sigma

• Linking Strategy execution to Performance Measurement

• Financial perspective, Customer perspective

• Internal Business Process perspective, Learning and growth perspective

• Developing and adapting the scorecard

• Case study illustration and discussion