The Essentials of Budgeting and Cost Control

Objective:

By the end of this Budgeting & Cost Control Essentials Training Course, participants will be able to:

• Develop an integrated planning, budgeting, and reporting process
• Actively participate in the budgeting process within the organisation
• Analyse cost behaviour and manage costs more effectively
• Master traditional and innovative approaches to budgeting and cost control
• Select effective performance measurement systems and KPIs

Content:

Management Control

• Budget target-setting, participation and control
• Strategic planning, budgeting and management control systems
• Key elements of planning: setting objectives, and responsibility accounting
• The role of financial control, and management accounting concepts
• Advantages and disadvantages of budgeting
• Budgeting within your organization

Budgeting and Cost Control

• The essential stages of the budgeting process
• Types of budgets, incremental and zero-based budgeting
• Budget preparation: operating budgets and cash budgets
• Variable costs and fixed costs
• Contribution and marginal costing
• Decision-making using marginal costing, and cost/volume/profit (CVP) analysis

Traditional, and Activity Based Costing & Budgeting

• Costs and activities
• Direct costs and indirect costs, product costs and period costs
• Cost allocation and absorption costing
• Product cost cross-subsidization, and activity-based costing (ABC)
• Activity based budgeting (ABB)
• Budgetary control: standard costs, flexed budgets and variance analysis

Capital Budgeting

• Capital investment costs and operating costs
• Accounting rate of return (ARR) and payback
• Discounted cash flow (DCF), and net present value (NPV)
• Cost of equity, cost of debt, and the weighted average cost of capital (WACC)
• Internal and modified internal rate of return (IRR/MIRR), and discounted payback
• Capital rationing, budgeting and the profitability index (PI)

Linking Financial and Non-Financial KPIs

• Planning for world class performance
• Drivers of corporate and shareholder value, and financial strategy
• The changing cost base and alternative approaches to costing
• The conflicts between accounting and business performance measurement
• Integrating financial and non-financial key performance indicators (KPIs)
• The balanced scorecard