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A budget is the formal expression of the plans and objectives of management that covers all phases of operations for a specific period of time. Without clearly outlined budgets, organizations are unable to predict profits or losses or create plans for the future ultimately leading to failure. This program will provide a foundation for:

• Determining how to select a budgeting system that suits your organizations specific needs
• Learning how to construct a budget to reflect your long-term objectives and performance targets
• Gaining unique and practical insight if how to pinpoint budget variances
• Adding credibility to your budget proposal
• Developing budgets for all activities of your company
• Defining the real value of budgets and how budgets can destroy the actual performance of the organization when used incorrectly

By the end of this course, delegates will be learn about:

· The ability to know what budget points are justified and be able to prove it!

· Instant insight into potential budget problems before you have to live with them

· An understanding of budget types and processes, and how each impacts your operations

· A complete glossary of terms dealing with each aspect of your budget process

· Confidence that your discussions with financial administrators won’t leave you struggling to understand budgeting concepts or terminology

· The tools necessary to meet your budget goals, whatever the economic environment

· The assurance that your budget will cover all your operating needs including surprises - without padding

Whether you are developing a budget or implementing one, learning the proven techniques in this workshop will make all the difference in the strength and success of your budget and your career. So, if you are a Senior personnel, Supervisor, Administrator, Department head, Key player on any budgeted team, or a Purchasing decision-maker

The What and Why of Budgeting

· Budgeting and Reporting Overview: So You Want Perfect Analytics

· Getting started: Budgeting is a communication process

· The key benefits of good budgeting and the pitfalls of bad budgeting

· Essential elements in planning any viable budget

· Know your organizations budgeting environment

· Putting the pieces together: The budget preparation phase - planning is most of the battle

· Monitoring the approved budget: Do more than just live with it … succeed with it!

· Administering a Budget

· Budgets are financial statements: How do we use them effectively. What do they tell you about the past ... the future?

· Learn how to use them to pinpoint organizational strengths and weaknesses

· The income statement: What does it measure? What is missing from it?

· The balance sheet budget: a measure of health of your department or organization

Administering a Budget

· The capital budget: The long-term commitment of viability. Just how practical are your plans for expansion, research and development, new personnel, etc.?

· The cash budget: The first line of survival

· Spot the key problems and opportunities every budgeting process uncovers

· Essential Budgeting Tools

· Methodology of effective budgeting

· The budgeting checklist

· Unit-cost budgeting: ideal for operations-oriented environments

· Fixed-cost budgeting: the tool budget-builders reach for most often

· Course Planning and Budgeting: A more strategic look at budgeting

· Review the methods available to address your unique budgeting challenges

· Zero-based budgeting: essential for justifying proposed expenditures from the ground up

· Activity-Based Budgeting (ABB): Fad or Fact?

Analysing Budget Types

· The final plan: sales plan, production plan, purchases budget, Labor budget, Operating expenses, Capital budget

· The sales plan begins with P X Q

· How to prepare a production budget

· Prepare a manufacturing budget including: budgeting for materials, direct labor and overhead

· How to plan and prepare a research and development budget

· Budgeting terms made simple; a glossary of words you will use again and again

Building the Budget

· It all begins with sales or revenues

· Where do revenues come from?

· Where do the pieces fit? Capital expense or operating expense?

· Examine capital expenditure requests

· Methods of economically evaluating capital expenditures and projects

· Controlling general and administrative expenses

· Develop unit indicators for budget preparation and control

· Identify overhead and determine proper allocation methods

· Budget Development

· Cash versus accrual accounting - why are they different?

· What are the rules for budgeting and who makes them?

· Use basic accounting technology to properly compare cash inflow to outflow

· Post approval, what steps to undertake after the budget is approved

· Top down or Bottom up? Which one works and why

· Management by Objectives, results that matter

Budget Variances

· Is the alleged variance within your control? What are some factors beyond your control? The right perspective will make the difference

· Learn where to look first for variance factors hardest to find

· How to know when and how your budget is warning you of outside interference

· Tips on how to respond to requests for variance explanations

· Monitoring the Budget

· Monitoring methods such as Management by Exception

· Understand the difference between fixed, variable and semi-variable costs using a simple but effective illustration

· Expect the unexpected: some costs simply cannot be budgeted - recognize them and incorporate them

· Learn and use the unit-cost concept immediately and effectively

· Establish and track monthly targets within your annual budget

· When to break the budget