Budget Preparation, Allocation & Cost Control

Day One: Budgeting & Cost Control in the Management System: Link with Strategic Planning

Budgeting and cost control need to be mastered in the wider management system in which they operate.

Key behaviours:

• Understand the organizational mission, vision and strategies
• Link strategy awareness with planning skills
• Translate the strategic understanding in action

Topics to be covered:

• Budgeting and the management system of contemporary organizations
• Strategic planning, budgeting and management control
• Strategic Management Accounting – setting goal and objectives
• From strategic to operating plans – actions and initiatives
• Measuring and managing the performance – KPIs and targets
• Managerial Accountability  

Day Two: Budgeting: Principles and Key Concepts

Budgeting enable strategy to be executed by connectives goals, objectives, initiatives and resources.

Key behaviours:

• Understand budgeting as tool for delegation
• Consider the behavioral implication of budgeting
• Reflect on the meaning of accountability

Topics to be covered:

• Understanding the context for budgeting
• The benefit of Budgeting and its role for achieving organizational targets
• The shortcomings of the budgeting process. How to improve them?
• Principles of budgeting
• Main issues with budget preparation
• Capex (capital expenditures) vs Opex (operational expenditures)

Day Three: Cost Analysis for Budgetary Purposes

Budgeting is about understanding how resources are consumed and delegated. An understanding of costs is crucial in this respect.

Key behaviours:

• Understand where expenses come from
• Explore the relationship between objects and available resources
• Focus on controllable costs

Topics to be covered:

• Cost concepts and terminology
• Different costs for different purposes
• Fixed Vs Variable costs: the Cost-Volume-Profit analysis model
• Contribution Margin analysis
• Manufacturing vs. non-manufacturing costs
• Period Vs. Product costs

Day Four: Traditional vs. Advanced Techniques in Cost-Control

Cost allocation is important to identify the full amount of resources required to manufacture a product, deliver a service, run a department, or manage a project.

Key behaviours:

• Understand the organizational structure and its processes
• Focus on the activity cost driver
• Link activity costing to management of activity

Topics to be covered:

• Under-costing and over-costing: understand allocation methods
• How to refine a costing system?
• Indirect (OH) Vs. Direct costs
• Traditional Cost Allocations systems Vs. Activity-Based Costing (ABC)
• Cost hierarchy & Cost drivers - Linking resources, activities and management
• Introducing Activity-Based Budgeting (ABB) and Management (ABM)

Day Five: New Integrated Performance Measurement Systems

The full understanding of organizational performance requires the integration of financial and pre-financial measures

Key behaviours:

• Understand organizational performance beyond the financials
• Focus on the value creation drivers
• Integrate and connect the data

Topics to be covered:

• Beyond budgeting: integrating financial and pre-financial information
• The drivers of value creation
• The Balanced Scorecard
• Strategy Maps
• Integrated Reporting
• Connectivity Strategic Goals, Objectives, Actions and Results