Budgeting, Accounting & Cost Control

In making financial business decisions, the decision maker needs to understand the fundamentals of budgeting and costing. This program has been devised to give business decision makers a good understanding on budgets, cost controls, variances and associated analysis that will lead to better decisions being made.

The course will clarify budgeting terms; clearly explain the methodology used and cover traditional budgeting methods through to newer methods and approaches.

## Course Objectives

• Understand the importance of a well-defined budget process
• Learn costing and budgeting terminology used in business
• Master techniques for cost-benefit analysis
• Learn how to construct profit, cash and balance sheet plans and budgets
• Learn how to evaluate variances from plan and identify corrective actions
• Understand discounted cash flow (DCF) techniques and their application to financial decision making
• Build and use budgets relevant to your organization

## Course Outline

The need for Financial Control in business

• Understanding accounting
• Management accounting versus financial accounting
• The relationship between business management and financial management
• How budgeting fits into the bigger picture
• How cost management improves an organization’s financial position
• Key aspects of managing working capital

Capital Budgeting and Investment Appraisal

• The time value of money
• Understanding Appraisal Techniques – Net Present Value (NPV), Internal Rate of Return (IRR) and Payback period
• Selecting an appraisal technique
• The use of Sensitivity analysis in evaluating projects
• Strategic considerations in assessing capital projects
• Creating an effective Capital Budgeting framework

Cost Analysis and Management

• Understanding cost structure and behavior
• Costs as a relationship to outputs – cost/volume/price relationship
• The concept of contribution margin
• Break-even analysis for planning and control
• Cost allocation and apportionment
• Benefit-cost analysis

Full Costing, Marginal Costing and Activity Based Costing

• Comparing full and marginal costing
• Direct and indirect costs in budgeting for decision making
• Role of costs in pricing strategies
• Activity Based Costing (ABC)
• Managing cost control

Budget Construction and Control

• Nature and purpose of budgets for planning and control
• Types of budgets and budgeting
• Creating Key Performance Indicators for financial and non-financial performance
• Building a budget
• Budgetary control and variance analysis
• Budgeting for non-financial measures -introducing the Balanced Scorecard