Competencies for Effective Finance and Budgeting Management Course

Course Overview:

The Competencies for Effective Finance and Budgeting Management Course aims primarily at provision of crucial skills to managers, supervisors and analysts who are charged with operationalization of budgets vis a vis strategic objectives of the organization.

Upon the completion of the course, the users will appreciate the positioning of budgeting in organizational financial statements, budget formulation and manage debt and capital reserves through incremental, zero-based, and activity-based budget approaches.

The course aims to cover cost control measures and tools, variance analysis, capital budgeting measures including NPV and IRR for the purpose of making financial analysis and managerial decisions. 

Apart from this, effective CVP analysis should be performed in combination with the budgeting in order to assist with critical management decisions. The target audience of this course is all the current and future users of management budgets at different organizationally constitutive units.

Course Objectives:

At the end of this Competencies for Effective Finance and Budgeting Management Course, learners will be able to do:

• Defend the importance of linking an organization's budget with its strategic plan
• Demonstrate how the budget relates to the key financial statements: balance sheet, income statement, and cash flow
• Prepare the key elements of an operating and capital budget and evaluate the different budgeting approaches used
• Apply cost control tools, analyze management variance reports and take proper corrective action
• Calculate different capital budgeting evaluation techniques as included in a capital expenditure proposal
• Utilize cost-volume-profit analysis in making budgeting decisions

Who Should Attend?

All managers, supervisors, and analysts who prepare or use management budgets.

Course Outlines:

Planning and the Functions of Management

• The critical functions of management
• Aligning the budget with the strategy of the organization
• Road map to strategy
• Budget as a planning tool
• Control: the missing link
• Planning pitfalls

The Key Financial Statements

• The accounting system
• The income statements
• The balance sheets
• The cash flow statement

Budgeting: Process and Approaches

• The advantages of budgeting
• The budget processes
• Rolling budgets
• The master budgets
• Operating and capital budgets
• The budgeted financial statements
• Approaches to budgeting:
• Incremental budgeting
• Zero-based budgeting
• Flexible budgeting
• Kaizen budgeting and continuous improvement
• Activity-based budgeting
• Tools of forecasting
• Direct and indirect costs
• Characteristics of an effective budget
• Problems in budgeting

Cost Control

• Budget as a control tool
• The control processes
• Characteristics of an effective control system
• Responsibility reporting
• Variance analysis: identifying the components of variance
• Variance analysis: taking the corrective action

Capital Expenditure Budgeting and Analysis

• Time value of money
• Simple versus compound interest
• Identifying and analyzing cash flows
• The discount rate: using the cost of capital
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Profitability Index (PI)
• Pay-Back Period (PBP)
• Accounting Rate of Return (ARR)
• Approval for Expenditure (AFE)
• Sensitivity and risk analysis

Cost-Volume-Profit analysis (CVP)

• Identifying the fixed costs and variable costs
• Computing breakeven point in units
• Computing breakeven point in sales
• Assumptions of CVP analysis
• Using CVP in budgeting decisions

see more: Conducting the Operational Audit on a "Value-for-Money" Basis Course