Effective Budgeting and Cost Control

Planning and budgeting are must-have skills for all professionals regardless of their function or managerial level.

Programme Code
TR-1053
Duration
5 Days
Delivery
Classroom - Virtual
Programme Overview

Planning and budgeting are must-have skills for all professionals regardless of their function or managerial level. This course covers the concept of budgeting as a planning tool, a financial device and a control mechanism.

Programme Objectives

By the end of the course, participants will be able to:

  • Defend the importance of linking an organization's budget with its strategic plan
  • Demonstrate how the budget relates to the key financial statements: balance sheet, income statement, and cash flow
  • Prepare the key elements of an operating and capital budget and evaluate the different budgeting approaches used
  • Apply cost control tools, analyze management variance reports and take proper corrective action
Target Audience

All managers, supervisors and analysts who prepare or use management budgets.

Target Competencies
  • Interpreting financial statements
  • Planning and budgeting
  • Cost control
Programme Outline

Planning and the functions of management

  • The critical functions of management
  • Aligning the budget with the strategy of the organization
  • Road map to strategy
  • Budget as a planning tool
  • Control: the missing link
  • Planning pitfalls

The key financial statements

  • The accounting system
  • The income statement
  • The balance sheet
  • The cash flow statement

Budgeting: process and approaches

  • The advantages of budgeting
  • The budget process
  • Rolling budgetsThe master budget
  • Operating and capital budgets
  • The budgeted financial statements
  • Approaches to budgeting:
  1. Incremental budgeting
  2. Zero based budgeting
  3. Flexible budgeting
  4. Kaizen budgeting and continuous improvement
  5. Activity based budgeting
  • Characteristics of an effective budget
  • Problems in budgeting

Cost control

  • Budget as a control tool
  • The control process
  • Characteristics of an effective control system
  • Responsibility reporting
  • Variance analysis: identifying the components of variance
  • Variance analysis: taking the corrective action