Strategic Planning, Effective Budgeting & Cost Control
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Get ahead in the planning, control, and budgeting cycle
Today, the human mind is often absorbed in so much data, that it has difficulty processing the multitude of facts and relationships simultaneously and sometimes forgets important elements. Thus, as plans become more and more intricate, they should be documented in writing and include qualitative narratives of goals, objectives, and means of accomplishing the objectives.
This budgeting and cost control course will allow the participant to explore and share with other participants new thoughts in the planning, control, and budgeting cycle, resulting in a renewed energy in returning to the workplace and implementing a more focused budgeting process, which communicates useful and timely information to management.
The course will provide a framework for each topic covered, and then will make extensive use of exercises and case studies.
- Live group instruction
- Detailed practical examples
- Use of case studies and real world examples
- Interactive participation
All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials
- Introduction to planning and control
- Budgeting overview
- Behavioural aspects of budgeting
- Understanding cost behaviour
- Flexible budgets and standard cost systems
- Developing an annual/master budget
- Conceptual aspects of budgeting
- Resource allocation
- Activity-based management and activity-based costing
- Controlling Costs: Economy, Efficiency & Effectiveness
- Delivering operational excellence
What this course will enable you to do:
- Acquire best practices in budgeting
- Understand the strategic role of cost concepts
- Explain the costs concepts to the use of cost information for management control
- Describe the role of budgets in the management process
- Discuss the importance of strategy and its role in the master budget
- Prepare a master budget and explain the interrelationships among its supporting schedule
- Understand zero-base, activitybased, and kaizen approaches to budgeting
- Explain the essence of control systems
- Develop flexible budgets for evaluating short-term financial performance
- Identify different cost control measures
- Measure and evaluate performance
- Leverage emerging technologies for delivering operational excellence
All too often finance’s role in strategic planning is limited to assembling the numbers. But finance people have skills that can add real value to strategic planning. This module looks at how to leverage core finance skills to improve the strategic plan.
- Key elements in strategic planning
- Finance’ role in supporting strategic planning
- Assessing financial impact of strategic choices
- Challenging the operational and people impact of strategic choices
The role of finance
The demands placed on the CFO by the CEO, other business executives and the board changes as the political and economic environment changes. This module reviews current demands and looks at how leading finance functions have responded.
- Finance’s role post global financial crisis
- Examples of world class finance functions’ roles
- Do business ethics have a role in finance?
- Dealing with ethical dilemmas
- Benchmarking maturity profiles for finance - scorekeeper through to business partner
Management of a Finance Function
Managing a finance function has special challenges because of the range of people (qualified and non- qualified accountants), the range of work (daily processing through to project work) and the inherent conservatism of people attracted to working in finance. This module assesses how this variety impacts the normal people and work management approaches and methods.
- Management vs. leadership
- Project management methods for month end / budgets etc
- Motivating finance people
- Retaining finance people
- Managing change in finance
Budgets are often criticised as being fine for financial control but not of much use in running the business. This module looks at best practice for preparing budgets whilst the ensuing modules provides an overview of how the budget process can be modified to make it really useful for the business.
- Role of budgets
- The budget process
- How to engage the business
Rolling Forecasts Overview
This module investigates how the budget process can be modified to make it forward looking and pivotal to running the business effectively.
- Role of forecasts and the link to strategy
- Comparing and contrasting budgets and forecasts
- Identifying key business drivers
*Budgeting and Forecasting Workshop * (Exercises and Discussions)
Delegates will get an opportunity to explore (via group based exercises) the budgeting process and key planning and forecasting techniques used to build and manage reliable budgets and forecasts, adjusting to reflect changing conditions and to improve performance.
- Setting budget targets and goals
- Budget responsibility centres
- Categorising and regrouping relevant information
- The key budgetary statements
- Budgeting Pitfalls
- Top-down & bottom-up budgeting
- Zero-based & sctivity based budgeting
- Multiple-scenario based and flexible budgeting
Types of Budgets
- Departmental budgets
- Cash budgets
- Capital and operating budgets
- Master budgets
Types of Costs
- Fixed & variable costs
- Controllable & uncontrollable costs
- Appraisal techniques (net present value, internal rate of return, economic order quantity, simple payback)
- Identifying corrective action
- Why have a rolling forecast?
- The rolling forecast process
- Creating forecast for revenue and expenditure
- Rolling forecast as a catalyst for change
Budget and Forecasting Templates
- Actual template
- Variance reporting template
- Reporting template
Benchmarking and Reporting
- Financial and non-financial key performance indicators (KPIs)
- Milestone monitoring
- Presenting complex budgets
Annual Budget and Forecasting Cycle
- Key drivers behind sales, costs and margins
- Scenario planning for uncertain futures
- Budget and forecasting timetable
Finance Business Partnering - How to find out what Finance’s customers really want
Whilst there are well established ways for identifying and interpreting what external customers want these need modification when being used for internal customers. This module looks at best practice for identifying what finance’s customers want and need.
- Conducting well-structured interviews
- Designing carefully considered questionnaires
- Monitoring customer satisfaction
- Management use of Budget and Forecast Data
A revised budget process will produce new information. This module reviews this new information and how the business needs to change to make effective use of it.
- The different types of reports and their use
- Developing quality commentary
- Structuring the monthly management meeting to best use the new information
Risk management is key to effective corporate governance. But very often the way it is implemented is heavy handed and a real burden on the business. This module looks at finance’s role in risk management and how to ensure that risk management in its own processes are cost effective.
- Role of risk management in corporate governance
- Finance’ role in supporting risk management
- Cost/effective risk management in finance's own processes
Managing/Communicating with Board/CEO/CFO
Whilst managing ‘downwards’ has its challenges, managing ‘upwards’ including the people who are Finance’s customers is really challenging and can have a significant impact on your career. This is exacerbated when there are significant events such as M&A or bankruptcy of a major customer. This module looks at how to manage upwards and how to manage in a business discontinuity event.
- Fundamentals of managing upwards
- Balancing requirements against resources
- Managing expectations and maintaining credibility
- Managing in a business discontinuity
Controlling Costs: Economy, Efficiency and Effectiveness
One of the strategic priorities of the finance function of an organisation is to focus on the provision of financial information for planning, controlling and decision making of the organisation’s activities in such a way to ensure efficiency and effectiveness that maximises profits. Thus, controlling costs becomes a strategic thrust that increases profits, improves operations, and maximises shareholder wealth or improve effectiveness for-profit and not-for-profit organisations. From this vantage point, we set out to:
- Review concepts and techniques for identifying, understanding, and controlling and managing costs to improve economy, efficiency and effectiveness of organisations.
- Review tools and techniques that are at a manager’s disposal to make short-term operational decisions.
Achieving operational excellence: Lean principles, Six Sigma and Technology Innovation In today’s fast paced and competitive business environments, executives are not only accountable for controlling costs and increasing revenues, but also for delivering operational excellence through improving productivity. We explore how managers can:
- Reduce cost, improve speed of service, and improve quality through the adoption Lean principles and Six Sigma methodology.
Organisations are increasingly leveraging emerging technologies to deliver operational excellence, as technology has become the greatest enabler and a significant differentiator in sustaining competitive advantage. We review how companies such as Amazon.com use web services, enterprise technologies such as customer relationship management (CRM), enterprise resource management (ERM) and architectures such as the Service Oriented Architecture (SOA) to manage costs and to deliver operational excellence, with real-world examples. We will use Harvard Business School (HBS) cases (Superior Manufacturing and Salem Telephone Company) and a book chapter on operational excellence to guide our discussion.