Budget Setting and Control

Introduction:

Budgeting in actual business situations is more than just a desirable skill; it is a critical factor for business profitability.

This symposium on budget issues illustrates the crucial interrelationships between budgeting, overall strategy, actual costing, and the measurement of achievement.

The objective of the seminar is to clarify the concepts and approaches associated with the budgeting process as part of managerial accounting and performance management.

Objectives:

By the conclusion of this budget setting and control course, participants will be able to:

• Connect finance and operations to improve the performance of budgeting and the implementation of strategy.
• Create a performance measurement system that integrates all aspects of the organization.
• Gain a clear comprehension of corporate budgeting aspects.
• Assess the financial consequences of employed strategies.
• Address problems of overhead allocation and consider how Activity-Based Analysis can support decision-making and pricing.
• Determine which budgeting techniques are most adaptive to their situation.
• Prepare appropriate and reasonable budgets.
• Benchmark profitability against costing and measure the effectiveness of employed measures in securing profitability.
• Strengthen their understanding by integrating budgeting, strategy, and performance measurement.
• Deepen their comprehension of the relationship between financial and operational aspects.
• Understand the potential non-financial impacts of budgeting.

Training Methodology:

• Practice in operational approaches
• Industry-level questions and answers
• Learning from colleagues

Course Outline:

Unit 1: Strategic and Financial Planning

• Comparison of financial accounting and managerial accounting.
• Exploring strategy, budgeting, costing, and performance evaluation as interrelated processes.
• Explanation of the concept of strategic planning, its varieties, and significance.
• Mission, vision, strategy, goals, and objectives.
• External environment and internal context: SWOT and PESTEL analysis.
• Assessing your firm's current situation.
• Identifying sources of value generation.

Unit 2: The Framework for Budgeting

• Defining what a budget is.
• The necessity of having a budget.
• Organizational budgetary structure.
• Different forms of budgeting.
• The budgeting process and its behavioral aspects.
• Sales forecasting with budgeting timelines.
• Understanding your organization’s budgeting process.
• Top-down vs. bottom-up budgeting approaches.
• Comparing previous budgets with current budgets and zero-based budgeting.
• Practical examples of budgetary schedules.

Unit 3: Cost Analysis for Budgeting

• Understanding cost: A survey of costs.
• Fixed and variable costs.
• The "Break-even" models – the equation approach.
• Understanding contribution margin.
• Direct costs and indirect costs.
• Activity-based costing versus traditional costing.
• Product-related costs vs. period-related costs.

Unit 4: Elements of Control Budget Variance

• Evaluating your organization’s budgeting practices.
• Budget management for departments and projects.
• Static plans and forecasting frameworks.
• Computing flexible-budget variances and sales-volume variances.
• Using standard costs in standard cost variance analysis with practical examples.

Unit 5: Beyond Budget: Redesigning Performance Evaluation Systems

• Advantages and disadvantages of budgeting activities.
• Improving budgeting practices in your organization.
• Exploring the future beyond budgeting.
• The balanced scorecard: Linking strategy to budgeting and performance measurement.
• Perspectives: Financial, customer, internal business processes, learning and growth.
• Developing and modifying balanced scorecards.