Advanced Budgeting, Planning & Forecasting

Objective:

By attending the Advanced Budgeting, Planning and Forecasting course, delegates will be able to understand:

• How to implement advanced planning and control techniques into your budgeting process
• Know how to integrate the budgeting process with the development of the company’s long-term strategic vision
• Know how to provide a decision support structure that provides timely and useful information to decision makers
• Successfully build integrated planning, budgeting and reporting process
• Know how to forecast costs and revenues with greater confidence
• Apply management tools to the budgeting process that contribute to strategic goals
• Effectively manage the budgeting process
• Identify key performance indicators for effective and focused decision making
• Develop ways to increase profitability and performance through streamlined planning and reporting

Content:

Budgets in Today’s International Environment

• Organizational Planning and Control Framework
• The Product / Information / Decision Support Cycle
• Strategic, Tactical, and Operational Forecasts
• The purpose of planning and budgeting in business
• Defining the strategic approach to business planning
• Building the strategic planning model using financial data
• Various strategic and tactical approaches to business planning
• Defining the Decision-Support model: Assumptions/Goals and Key Success Factors

Budgeting and Planning

• The budget and the functions of management
• Budget as a planning tool
• Budgets and the key financial statements
• The top-down versus bottom-up process

Budget Cycle, Process and Approaches

• The budget cycle
• Characteristics of successful budgeting
• Making the budget a value-adding activity
• Top ten problems with budgeting

Approaches to Budget Development

• Zero Base Budgeting
• Activity-based Budgeting
• Rolling Budgets
• Operational Unit Budgeting
• Choosing the proper budgeting approach:
• Incremental budgeting
• Flexible budgeting
• Kaizen budgeting
• Programme budgeting
• Developing the Cash Budget

Forecasting Techniques

• Identifying fixed, variable and semi-variable costs
• Application of Regression in the development of budgets
• Building the financial simulation model using articulated financial statements
• Building the financial simulation model using simulation
• Forecasting models
• Qualitative and quantitative methods
• Steps in developing forecasting models
• Data conditioning techniques
• Exponential smoothing and moving averages
• Simple and multiple regression analysis

Advanced Capital Budgeting Evaluation Techniques

Business Risk and Cost of Capital

• Classifying investment projects
• Cash flow estimation
• Analyzing investment and operating cash flows
• The time value of money concept
• The required rate of return
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Multiple internal rates of return
• Modified Internal Rate of Return (MIRR)
• Profitability Index (PI)
• Payback period and discounted payback period
• Capital rationing
• Comparing and evaluating techniques