Introduction

The seminar focuses on the internal view of an organisation: planning, cost, and control systems, risk management in project appraisal, and integrated planning and control systems. Successful firms plan their future. This seminar will facilitate your understanding of the planning process with budgeting woven in followed by those very important control mechanisms to enhance performance.

Seminar Objectives / Key benefits

• Determine full costs of outputs for the goods and services provided
• Conduct a Cost Volume Analysis (CVA), applying it to multiple cost drivers to make recommendations for program management
• Apply Variance Analysis as a management tool to analyze performance-based budgets and determine where you stand in achieving your performance goals
• The purpose of budgets:
  • Motivation
  • Targets
  • Benchmarking
  • Control
  • Responsibility
• Types of budget
  • Fixed
  • Flexible
  • Rolling
  • Zero based
• Stages of preparation
• Cash budgets – cash flow forecasts
• Master budgets – P & L and Balance Sheet
• Initial steps in constructing a spreadsheet model
• Relevant costs
• Overheads
  • Allocation
  • Appointment
• Basic contribution analysis
• Break even analysis
• Marginal revenue and marginal cost

Who Should Attend?

The staff person who will be responsible for entering data into the budget system or training others how to enter information.

Those who want to gain control of the firm's financial standing and obtain a firm grasp on the numbers side of their job.

Personal Impact

• Delegates will feel more comfortable with terminology.
• They will understand the budgeting methods most useful to them.
• They will understand how to construct a relevant and efficient budget from raw data.
• The delegates will learn to evaluate the usefulness of costing techniques in accurately calculating and ensuring profitability.
• They will appreciate the factors which affect the reliability of accounting information.

Organisational Impact

• The organisation will be in a better position to develop useable budgets
• Those attending will be in a position to lead others in budget preparation
• Learning will be enhanced
• Wasted time will be reduced
• Strategy & budgeting will be integrated

Training Methodology

The seminar will be conducted along workshop principles with formal lectures, case studies and interactive worked examples. Relevant case studies will be provided to illustrate the application of each tool in an operations environment. Each learning point will be re-enforced with practical exercises. Difficult mathematical concepts are minimised wherever possible and handled in a visual way that is easy to understand with examples demonstrated.

Seminar Outline

Day 1 - Budgeting and the Management Process

• What is a budget
• Why create budgets
• Strategy - direction and vision
• Implementing strategy - the operational planning process
• Budgets - the financial expression of the operating plan
• The purpose of budgets - control
• The human side of budgeting

Case study, part 1- Roles and responsibilities of the team

Day 2 - The Framework for Budgeting

• Elements of the budget framework
• The financial statements
• Advantages and limitations of budgets
• Reporting - the key to control

Developing the Revenue Budget

• Operating versus non-operating revenue
• Revenue recognition versus sales
• Sales forecasting
• Profitable growth and the cost of capital
• Pricing considerations

Case study, part 2 - The sales forecast & preparation of financial statements

Day 3 - Budgeting Costs and Expenses

• Cost, profit, volume relationships
• Cost of service provided
• Operating expenses - selling, G/A, R/D
• Directly variable expenses
• Fixed expenses
• The allocation problem
• Assignable and non-assignable expenses
• EBIT, EBITDA

Case study, part 3 - Budgeting operating profit

Day 4 - Accountability for Results

• The business unit statement
• Variance analysis
• Priorities
• Long term versus short-term results
• Contingency plans
• How not to cut a budget

Case study, part 4 - The profit centre statement

Day 5 - Building the Balance Sheet

• Key financial ratios
• The capital budget –
• NPV,
• IRR
• PI
• The cost of capital and the hurdle rate

Cash Flow

• Budgeting cash requirements
• Developing a cash flow forecast
• The three sources of cash
• Free cash flow
• The completed budget

Case study, part 5, investment decision - Lease or buy; make or buy

Oxford Management Centre
John Eccles House
Robert Robinson Ave
Oxford Science Park
Oxford
OX4 4GP
United Kingdom

Tel: +44 1865 338088

Fax: +44 1865 338100

email info@oxford-management.com