Financial Skills: Budgeting and Costing

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Course Overview

Budget responsibility is a critical part of the modern manager's role in defining the financial consequences of their business plans. A lack of understanding is commonplace which, combined with bewildering jargon, methodology and practices, leads to negativity and little proactive involvement. This one-day course reinforces the value of budgeting and costing processes, and shows how managers can enhance the performance of their business or department.

Audience

Specialist non-financial managers who are involved in budgeting processes or costing frameworks, or those who would benefit from understanding how business performance can be enhanced

Skills Gained

By the end of the course, participants will be able to:

• explain how managerial attitude to budgeting and costing affects the way in which these processes operate
• define the role of bargaining and influence in the budgeting process
• explain how budgets can cope with changes in the business environment
• define the basic concepts underpinning standard costing and variance calculation

Course Outline

What is budgeting?

• importance of budgeting - what are its aims?
• why organisations gain benefit from the process
• how do we make budgets effective?

Foundation stones of financial reporting

• trading, profit and loss account
• balance sheet
• cash flow statement

Planning and control

• the budget manager's relationship with finance
• the process - constructing forecasts, limiting factors, sensitivity and break-even analysis

Different types of budgeting approach

• flexible, zero based, incremental, activity based budgeting
• capital, revenue and cash distinctions
• accruals concept

Analysing variance from budget

• links to performance measurement
• management by exception
• standard costing
• variances: sales, cost, idle time, overhead, mix and yield

Marginal and absorption costing

• methods of costing
• advantages and disadvantages of each

Principles of performance measurement

Financial Skills: Budgeting and Costing / M12