Mastering Budget Preparation Skills

Introduction

The Budget Preparation Skills program is a comprehensive course designed to teach participants how to effectively manage costing and budgeting within an organization. This program covers all the key aspects of cost analysis, budget preparation, and performance measurement while addressing various issues related to effective budgeting.

This course is ideal for professionals who want to enhance their budgeting skills by understanding cost behavior, enabling them to develop practical and achievable business plans.

Objectives

After completing this course on effective budget preparation skills, participants will be able to:

• Identify key factors needed when analyzing business processes.
• Establish a useful system for costing that supports budgets.
• Enhance decision-making through strong financial and budgeting skills.
• Effectively use financial and operational data during the budget preparation process.
• Manage organizational performance by adopting best practices.
• Understand the jargon used in costing and budgeting in business.
• Appreciate the proper structure of the costing and budgeting process.
• Accurately determine the total costs of goods and services provided.
• Learn both traditional and modern budgeting techniques.
• Integrate finance with operations for efficient strategic planning and execution.
• Develop comprehensive performance measurement systems to monitor and enhance organizational success.

Training Methodology

• Interactive workshops
• Case studies and real-world applications
• Hands-on exercises and simulations
• Group discussions and collaborative activities
• Expert-led lectures and presentations
• Self-assessment and reflection exercises
• Continuous feedback and coaching
• Individualized action plans

Course Outline

Unit 1: The Management Process: Budgeting Role

• The role of budgeting in management accounting
• Connection between cost, strategy, and performance measurement
• Implications of budgeting on the value creation process
• Understanding budgets: Financial terms and operating plans
• Linking financial issues with operational problems
• Behavioral consequences of using a budgetary system

Unit 2: The Framework for Budgeting

• Components of the budgetary framework
• Key concepts and terminology
• Pros and cons: Critical issues to consider
• Overview of financial statements
  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
• Introduction to full cost analysis in decision-making
• The importance of understanding full costs

Unit 3: Cost Analysis for Budgetary Purposes

• Importance of costing for budgeting
• Cost terms and purposes
• Fixed and variable costs
• Cost-profit-volume relationships
• Concept of contribution margin
• Direct cost versus indirect cost – allocation problem
• Traditional methods vs. Activity-Based Costing

Unit 4: Flexible Budgets & Variance Analysis

• Budgeting for management control
• Differences between static and flexible budgets
• Computing flexible-budget variances & sales-volume variances
• Use of standard costing in variance analysis
• Integrating continuous improvement into variance analysis
• Is budgeting alone sufficient?

Unit 5: Beyond Budgeting: Broadening Performance Measurement Systems

• Drawbacks of traditional budgeting and measurement approaches
• Linkage between financial and operational issues
• The Balanced Scorecard & Six Sigma
• Linking strategy execution to performance measurement
• Perspectives: Financial, Customer, Internal Business Process, Learning & Growth
• Developing the scorecard