Strategic Budgeting and Cost Management

Introduction:

Business decision-making requires some level of risk. This Strategic Budgeting and Cost Management training program emphasizes core competencies necessary for effective financial management. Participants will assess the value of a structured approach to budgeting, recognize the influence of cost behaviors on budgeting, and develop realistic cost-cutting plans. By incorporating practical budgeting and cost management approaches, attendees will enhance their decision-making skills and financial understanding.

Objectives:

Upon completion of this Strategic Budgeting and Cost Management course, participants will be able to:

• Identify the fundamental components necessary to construct a robust and convincing business case.
• Acquire the necessary budgeting and financial understanding to manage costs effectively.
• Locate and utilize financial and business information to assist in the budgeting tasks.
• Apply new knowledge to streamline standard business processes using relevant software.
• Recognize the importance of a well-defined cost-control strategy.
• Understand and use the business language of costing and budgeting.
• Perform cost-effectiveness analyses using various methods.
• Develop and manage profit, cash, and balance sheet budgets and plans.
• Analyze budget variances and implement corrective measures.
• Apply discounted cash flow (DCF) techniques in financial decision-making.
• Structure and control costs for organization-specific budgets.

Training Methodology:

• Case Studies
• Interactive Lectures
• Group Discussions
• Role Plays
• Simulations

Course Outline:

Unit 1: The Need for Financial Control in Business

• Basics of accounting
• Management vs. financial accounting
• Interdependence of business and financial managers
• Importance of budgeting
• Impact of cost management accounting on financial position
• Management of working capital

Unit 2: Capital Budgeting and Investment Appraisal

• Time value of money
• Appraisal techniques: Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period
• Choosing appraisal techniques
• Sensitivity analysis for project evaluation
• Capital project assessment and strategic issues
• Developing an efficient capital budgeting process

Unit 3: Cost Analysis and Management

• Cost structure and behavior
• Costs in relation to outputs: volume and price
• Contribution margin
• Planning and control using breakeven analysis
• Costing and apportioning
• Cost vs. benefit evaluation

Unit 4: Full Costing, Marginal Costing, and Activity-Based Costing

• Full costing vs. marginal costing
• Direct and indirect cost categories
• Importance of costing in pricing policies
• Activity-Based Costing (ABC) System
• Cost control management in accounting

Unit 5: Construction of Budgets and Control

• Purpose and classification of budgets
• Constructing performance measures: financial and non-financial
• Preparing and analyzing budgets
• Budget variances and control
• Budgeting for non-financial measures: balanced scorecard

Additional Modules

Module of Project Cost Control Training

• Basics of project cost control
• Importance and anticipation of unforeseen financial situations
• Techniques and tools for project cost control

Cost Management and Control

• Analysis, management, and control of costs
• Theoretical and practical aspects of cost control
• Real-world cost control experiences through case studies and practical exercises