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Training Course Summary:

- A thorough understanding of the strengths and weaknesses of conventional approaches to budgeting
- A framework, methods and techniques to improve or replace your existing processes

This course will give accountants and senior managers a practical understanding first, of how to replace the conventional annual budget with a more credible budgeting process; and second, of how rolling forecasts can be incorporated to make the budget a responsive management tool. Your budget can be the vehicle that carries all change plans inspired by

- changes in strategy
- changes in the market
- competitor moves
- advances in technology
- efficiency and process improvement ideas
- failure to meet previous budget goals


with the accountant playing a pivotal role as catalyst for change in a process that is perceived by other functions as effective and credible.

Who Should Attend:

Board members, senior managers and accountants with responsibility for budgeting.

Training Course Overview/Content:

Why do we budget?

Information for sources of capital - equity and debt
Managing investor expectations
External reporting
Planning
Control
Improvement
Financial planning

The conventional annual budget

Weaknesses (and strengths - there are some!) of the conventional annual budget
Planning horizon
Cost centres - functional focus
Accountabilities
Volume effects
Capacity
Targets and systems of incentive and reward
Goodhart's law
Culture issues
Arguments for and against abandoning the annual budget


Key elements for successful budgeting and forecasting

A process, not an event
Shareholder value
Strategy - positioning and capability
Linking the budget to strategy - the strategy tree
Understanding activities
Different types of activity costs - front-line/internal service/sustaining/imposed
Different types of business process - management/enabling/delivery
Budgeting for overhead resources - special cases
Anticipating or planning change:
method changes
process changes
service levels
the volume effect: cost drivers - vertical/horizontal
the volume effect: capacity
The time dimension - fixed and variable costs
Non-people costs


Why an annual budget?

A new purpose for the annual budget
Distingushing between budgeting and managing
The nature of accountability
method accountability
process accountability
shared accountability
The external perspectives
Risk assessment
Planning or anticipation?
Special factors: public sector budgeting


Rolling forecasts

"The future hasn't happened yet"
Rolling forecasts: what has to roll?
Flexing the budget - why and how
The importance of performance measurement/management systems
Managing cause and effect
Risk management


Removing boulders on the runway

Roles and responsibilites
Measurement, behaviours and culture
A model for effective change
Leadership
Communications
Organisation issues - centralisation/decentralisation, empowerment and control


Systems issues

Making the process efficient as well as effective



6 CPD hours (for non-CIMA members)

THIS COURSE IS RUN BY CIMA MASTERCOURSES