Effective Budgeting and Cost Control

1. Demonstrate how the budget relates to the key financial statements: balance sheet, income statement, and cash flow.
2. Prepare a budget consistent with the organization’s strategic plan.
3. Use appropriate estimation techniques in the development of revenue and expense budgets.
4. Identify all the appropriate costs to be included in a capital expenditure proposal.
5. Apply cost control tools, analyze management variance reports and take proper corrective action.  

All managers, supervisors and analysts who prepare and/or use management budgets.

Planning and the Functions of Management:

• The Critical Functions of Management
• Aligning the Budget with the Organization’s Strategy
• Road Map to Strategy
• Budget as a Planning Tool
• Control: The Missing Link
• Planning Pitfalls

The Key Financial Statements:

• The Accounting System
• The Income Statement 
• The Balance Sheet
• The Cash Flow Statement

Budgeting: Process and Approaches:

• The Advantages of Budgeting
• The Budget Process
• Rolling Budgets
• The Master Budget
• Operating and Capital Budgets
• The Budgeted Financial Statements
• Approaches to Budgeting:
  • Incremental  Budgeting
  • Zero-Based Budgeting
  • Flexible Budgeting
  • Kaizen Budgeting and Continuous Improvement
  • Activity-Based Budgeting
• Tools of Forecasting 
• Direct and Indirect Costs
• Characteristics of an Effective Budget
• Problems in Budgeting

Cost Control:

• Budget as a Control Tool
• The Control Process
• Characteristics of an Effective Control System
• Responsibility Reporting
• Variance Analysis: Identifying the Components of Variance
• Variance Analysis: Taking the Corrective Action

Capital Expenditure Budgeting and Analysis:

• Time Value of Money
• Simple versus Compound Interest
• Identifying and Analyzing Cash Flows
• The Discount Rate: Using Cost of Capital
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Profitability Index (PI)
• Pay-Back Period (PBP)
• Accounting Rate of Return (ARR)
• Approval for Expenditure (AFE)
• Sensitivity and Risk Analysis

Cost Volume Profit Analysis (CVP):

• Identifying the Fixed Costs and Variable Costs
• Computing Breakeven Point in Units
• Computing Breakeven Point in Sales
• Assumptions of CVP Analysis
• Using CVP in Budgeting Decisions

• The Training lectures.
• The Group discussions.
• The Training Workshops.