Financial Skills: Planning forecasting and budgeting

Scheduled Dates (sort by: location | date)

Audience

Anyone with significant budgetary responsibilities will benefit from attending this event, particularly:

• Managing directors
• Finance directors
• Strategic business unit managers
• Other directors and senior managers
• Management accountants

Skills Gained

• Translate strategy into results
• Generate a business plan that drives organisational activity
• Ensure realistic forecasting
• Allocate appropriate resources
• Set budgets that can be met
• Identify and manage key risks
• Avoid the weaknesses of conventional approaches to budgeting

Above all, this programme will show you how strategy, business planning, forecasting and budgeting should fit together and support one another - and how to make this happen in your own organisation.

Course Outline

Creating business plans from the strategy

• The meaning of strategy
• A technique for translating strategy into plans - positioning and capability
• Is the strategy financially viable? - assessing value
• Ensuring plans are robust and complete - the strategy tree

Forecasting

• Key elements of a successful forecasting process
• Involving all the key players to help reach a realistic but challenging forecast
• Identifying and providing relevant data
• Providing simple choices for the assumptions underpinning the forecast, avoiding complex, impenetrable formulae
• Recording assumptions and choices
• Avoiding distortion caused by incentives
• Overview of the main mathematical techniques
• Technique for creating plans based on forecasts in an uncertain world
• Linking forecasts to the business plan
• Modifying the plan if the initial forecast isn't satisfactory
• Linking forecasts to internal resource needs
• Using cost drivers
• Determining which internal resources will be affected by the forecast - and by how much
• Identifying capacity constraints and spare capacity

Achieving cost reduction

• Methods for building tangible cost reduction plans into the budget rather than unsubstantiated promises - the power of activity-based techniques

Overcoming the problems of conventional annual budgeting

• The conventional annual budget
• Purposes and weaknesses
• Culture issues
• Arguments for and against abandoning the annual budget
• Rolling forecasts and budgets
• The benefits of rolling forecasts and budgets
• What has to roll?
• Techniques for rolling the budget without enormous effort and without losing accountability
• Budgeting for overhead resources - special case
• Ensuring the budget reflects the strategy
• Timing: reviewing the strategy just before setting the budget
• How continuous budgeting helps the timing
• Making sure that plans for change are fully integrated in the budget
• Making budget reviews effective
• The importance of budgeting outputs as well as inputs in reviewing performance
• Picking the key performance measures for tracking progress
• Reporting performance and having a robust process for doing something about deviations from plan
• Getting effective accountability
• The nature of accountability
• Identifying the underlying reasons for variances
• The double-edged nature of targets - making sure they promote good not ill
• Systems issues
• Making the forecasting and budgeting processes effective as well as efficient
• What kind of software: spreadsheets or application-specific?

Risk

• How to assess the risks associated with forecasts, plans and the budget
• Drawing up plans for avoiding, monitoring and mitigating risks - the risk register
• Stakeholder analysis

Financial Skills: Planning forecasting and budgeting / MD-PFB