Strategic Planning, Effective Budgeting and Cost Control

Accounting and Auditing

Course Overview

Planning and budgeting are must-have skills for all professionals regardless of their function or managerial level. This course covers the concept of budgeting as a planning tool, a financial device and a control mechanism. In addition, it provides the necessary application tools required to making long-term and short-term planning decisions.

Course Objectives

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

  • Defend the importance of linking an organization's budget with its strategic plan
  • Demonstrate how the budget relates to the key financial statements: balance sheet, income statement, and cash flow
  • Prepare the key elements of an operating and capital budget and evaluate the different budgeting approaches used
  • Apply cost control tools, analyze management variance reports and take proper corrective action
  • Calculate different capital budgeting evaluation techniques as included in a capital expenditure proposal
  • Utilize cost-volume-profit analysis in making budgeting decisions

Course Outline

Planning and the functions of management

  • The critical functions of management
  • Aligning the budget with the strategy of the organization
  • 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
MagnaSkills
Study Online

From $ 250.00

1 Week Face to Face Classes

From $ 2500.00

1 Week Face to Face Classes

From $ 3200.00

Course Features
  • 2659 Views
  • 8 Weeks Online
  • 1-2 Weeks Classes
  • Certified

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