Fundamentals of Budgeting

Training Goals & Objectives

This course on Fundamentals of Budgeting is designed keeping in view – that many professionals are responsible for budgets & forecasts, but never took any courses to learn the fundamental principles of budgeting and forecasting.

This hands-on intensive course targets professionals from finance as well as non-financial background, who need to understand the fundamental budgeting principles and forecasting methods, budget process, and want to improve their financial literacy.

Who Should Attend

Professionals from different level of the following departments can attend this workshop – Budgeting is essential for all functions of an organization and smart budgeting leads to optimum management.

  • Accounts & Finance Department
  • Marketing department
  • Operation Department
  • Business Analysts
  • Admin & Secretarial Professionals
  • IT Support & Services Department and other areas

Practice Areas

The budgeting process begins with zero-based budgeting, that is starting at zero and determining the needs of each department and tasks which can provide a far more accurate budget than just allowing for a simple incremental increase each year.

Budgeting also plays a critical role in strategic planning. As software and hardware needs become more sophisticated, annual budgeting is a must. Unless you plan ahead and include the costs of changes in your budget, you may find your organization going without the benefits of future advancements or expending significant amounts of money.

As many organizations have recognized over the past year, costs are certainly not a constant factor. Although it is not possible to predict fluctuations in variable costs it is important to review trends and determine if certain costs are unnecessary.

Training Program

  • Course contents of the program are as under:

Pre Session Activities

  • Networking & Participant Introduction
  • Course introductions & Overview

Can you survive and thrive without a budget?

  • Budget: Background
  • Budget and business plan
  • Budget and forecast
  • Budget and the business strategy
  • Budgeting process
  • The planning cycle
  • Potential problems

How do you build a budget in a climate of uncertainty?

  • Developing budgets
    • – From operational budgets to financial budgets
  • Process/steps
  • Types of budgets
    • – Fixed
    • – Flexed
    • – Rolling

  • Methods of budgeting

    • – Incremental

    • – Zero based budgeting

Budget & Forecast – Key to optimization

  • Approaches to budgeting

    • – Top down
    • – Bottom up
    • – Iterative
    • – Activity orientated
    • – Task orientated
    • – Planning programming budgeting system
  • Behavioural aspects in budgeting
  • Forecasting versus budgeting

Master Budgets – from A to Z

  • Process flow of an organization

    • – Gathering information
    • – Anticipating and budgeting for revenues
    • – Estimating expenditure
    • – Understanding costs

  • Operational budgets

    • – Sales
    • – Production
    • – Raw Materials
    • – Labour

  • Financial budgets

    • – Statement of financial Performance
    • – Statement of financial Position
    • – Statement of Cash flows

Cash Budgeting – no cash no budget!

  • Myth of “Profit”
  • Cash Flow Versus Profit
  • Cash Conversion Cycle
  • Managing Surplus
  • Operating Activities, Investing Activities; Financing Activities
  • Analysing Business Performance Using Cash Flow Statement

Capital Budgeting – have you looked at all the feasible options?

  • Incorporating capital investment decisions into the budget and planning process
  • Capital investment evaluation techniques
  • Importance of Cost of Capital
  • Payback period
  • Net present value
  • Internal Rate of Return
  • What to rely NRV or IRR

Controlling and monitoring a budget, is it worthwhile?

  • Analysing discrepancies
    • – Variance analysis
  • Analysing budget errors
  • Investigating unexpected variances
  • Making necessary adjustments
  • Lessons learned

Budgeting – an effective tool for performance management?

  • Managing financial performance at corporate level

    • – Financial statements ( Statement of Position; Income Statement; Cash flow statement)
    • – Ratio analysis using financial statements
    • – Profitability
    • – Liquidity
    • – Gearing
    • – Investor ratios
    • – EBITDA

  • Managing performance at division level

    • – Divisionalisation
    • – Controllable profits/Investment Centre
    • – Return on Investment (ROI)
    • – Residual Income
    • – ROI vs. Residual Income

Consolidation of knowledge acquired

  • Application in practice
  • Candidates’ views
  • Key messages

Key Takeaways

  • Build the understanding of the impact of budgeting in achieving your organisation goals
  • Equip you with different budgeting techniques, approaches and methodologies applicable to different
  • industries and scenarios
  • Understanding the Importance of budgeting and forecasting in a climate of uncertainty
  • Techniques and methodologies for effective budgeting, its impact on performance management.
  • Significance of the behavioural aspects in budgeting and forecasting.

Certificate Distribution Ceremony