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The Fundamentals of Budgeting

Who Should Attend?

This programme is designed for those responsible for preparing / completing budgets for their departments, as well as those accountable for managing their organization’s budget process, but who have had no formal training or experience. It is very useful for managers and non-managers in any industry, from small to large companies / organizations, who need to keep a tight control on costs in a challenging business environment.

Course Objectives

  • To learn the difference between a budget and a forecast
  • To learn the steps to creating a budget
  • To understand the different approaches to budgeting
  • To learn how to project current year sales
  • To understand the basics of production and raw material budgeting
  • To learn how to create sales budgets
  • To learn how to budget for new businesses
  • To learn the difference between budgeting for fixed expenses, and budgeting for variable expenses
  • To learn how to budget for payroll
  • To understand how capital budgeting is different to other budgeting
  • To learn about Return On Investment (ROI) in order to make good decisions about capital budgets
  • To understand how to allocate budgets properly by month
  • To understand how to set up a cash budget
  • To use variance analysis to assess performance against budget
  • To learn about budgeting for projects

Programme Content

DAY ONE

  • The Benefits Of Budgeting
  • The Difference Between A Budget And A Forecast
  • Strategic Plans
  • Different Budget Approaches:
    > Zero-Based Budgeting
    > Top-Down
    > Bottom-Up
    > Rolling / Continuous
    > Flexible Budgets
  • Components Of The Master Budget
  • Sales Budget
    > Current Year Projections
    > How To Create A Sales Plan
    > Product Life Cycle
    > Sales By Month
  • Budgeting For A New Business
  • Budget Templates For Unit Managers
  • Budgeting For Fixed And Variable Expenses
  • Production And Raw Materials Budget
  • Payroll And Headcount Budget
  • Budgeting For Contingencies
  • How To Choose A Fiscal Year

DAY TWO

  • Pro Forma Income Statements
  • Steps To Creating A Budget
  • Budget Review And Variance Analysis
    > Price / Volume Variance
    > Labour Variances
  • Cash Budgets
  • Capital Budgeting
  • Investment Appraisal Techniques
    > Payback Period
    > Average Rate Of Return (ARR)
    > Net Present Value (Present Value And Discounted Cash Flow)
    > Internal Rate Of Return (IRR)
  • Budgeting For Projects
    > Estimation Techniques
    > Project Reserves
    > Earned Value Management