Workshop on Effective Budgeting & Operational Cost Control
The effective management of budgets and operational cost is a key aspect in leading and managing organizations. Budgeting, as well as tracking, controlling, and reducing cost, represent essential activities to be performed and monitored as strategies get executed.
To ensure effective and prudent financial management in the organization, there is the need to prepare a realistic budget and ensure compliance with the approved budget plan. Furthermore, operational costs need to be monitored and controlled so that as to ensure financial discipline. This training program will help participants appreciate the concepts and methodology around cost management and budgeting.
This program is designed for senior managers who manage budgets, managers who are currently managing projects and/or contracts. Senior managers who control cost and budgeting for their departments or organizations will also find this course extremely beneficial.
At the end of the course, participants will be able to:
■ Apply the essential concepts of accounting, budgets and finance
■ Apply the use of unit cost measurements in performance-based budgeting
■ Maintain strategic cost control.
■ Appreciate the importance of reducing unnecessary costs
■ Determine and apply the costs estimated to produce those outputs and calculate a cost per unit of output.
■ Use best practices to create written budget justifications
■ Locate guidance on budgeting for capital assets, and integrate performance budgeting into your organization’s budget formulation process
■ Identify appropriate outputs for an organizational unit or programme component.
Day 1: Understanding the Common Financial Language
Key role of budgeting and cost control in contemporary organizations
The 21st-century business imperative: delivering value-added
Towards a cross-functional process-view of the organization
Financial vs. Managerial accounting (decision making)
Understand your processes: integrating financial and non-financial aspects
Identify the key processes/projects for your own organization
Day 2: Contributing effectively to Strategic Planning
Budgeting and Cost analysis
Cost concepts and terminology
Different costs for different purposes
Fixed Vs Variable costs: the Cost-Volume-Profit analysis model
Contribution Margin analysis
Manufacturing vs. non-manufacturing costs
Period Vs. Product costs: inventory evaluation and control
Day 3: Linking Budgeting and Forecasting into the Business’ Strategy
Traditional vs. Advanced Techniques in Cost-control
Under-costing and over-costing: the consequences for profitability
How to refine a costing system?
Indirect (OH) Vs. Direct costs: Traditional Cost Allocations systems Vs. Activity-Based Costing (ABC)
Cost hierarchy & Cost drivers
Linking resources, activities, and management
Introducing Activity-Based Budgeting (ABB) and Management (ABM)
Day 4: Preparing Rolling Forecasts
Role of forecasts and the link to strategy
Comparing and contrasting budgets and forecasts
Identifying key business drivers
The rolling forecast process
Applying ‘best practice’ risk management and control
Role of risk management in corporate governance
Finance’ role in supporting risk management
Cost / Effective risk management in Finance’ own processes
Day 5: Cutting costs and improving effectiveness
Role of cost management in the business strategy
Cost management and motivation
Embedding cost control in the business
Role of Finance in cost control
Beyond the Budgets: Balanced scorecards and Six-sigma
Broadening performance measurement systems
The key role of customer satisfaction and business process re-engineering
Beyond budgeting: integrating financial and non-financial issues
Introducing the Balanced Scorecard
Introducing the Strategy maps
Methodology: Lectures, discussions, exercises, case studies, audio-visual aids will be used to reinforce these teaching/learning methods.