Budgeting & Forecasting

Duration: 3 Days

Overview

Outline

A practical knowledge of budgeting skills is vital for effective operational management, and for ensuring that short term tactical goals are correctly aligned with medium and long-term strategic objectives. This is, of course, particularly challenging in the current economic and social uncertainty, making it imperative for non-financial corporate leaders to keep abreast of the latest forecasting techniques and practices.

 

This course is designed for non-financial managers involved in developing operational cost budgets within manufacturing and productions environments.

 

Each topic is reinforced with best practice examples and real-work case studies taken from the manufacturing industry. Furthermore, budgetary best practices are interwoven into the concepts and workshops to ensure that the outcome of the course is relevant to the practical needs of the attendees

PLANNING THE BUDGET

Organizational Planning Process

  • Understanding the budgetary cycle

  • Establishing objectives / targets

  • Identifying approach strategies

  • Aligning strategic, business and operational objectives

Budgeting Perspectives

  • Functional: e.g., Manufacturing, Warehouse & Distribution, Marketing, Sales, Information Technology etc.

  • Corporate, Segment or Divisional

  • Responsibility centres, Cost centres and Profit centres

  • Bottom-up and top-down approaches

Identifying Constraints & Relationships

  • Identifying the limiting factors

  • Understanding the causal relationships/dependencies between functional budgets

  • Budget assumptions and limitations

PREPARING & IMPLEMENTING THE BUDGET

Alternative Budgeting Approaches 

  • Flexible budgeting

  • Activity-based budgeting

  • Zero-based budgeting

  • Rolling budgets

Application of Quantitative Techniques to Sales & Cost Estimation

  • Using standard & average costing

  • Fixed & variable costs

  • Direct & Indirect costs

  • Capital & Operating costs

  • Regression analysis

  • Learning curve applications

  • Trend analysis

  • Identifying price, volume and cost drivers

Master and Sub-budgets and 

  • Understanding the budget hierarchy

  • Preparing the Operational (including sales, production and inventory) budgets

  • Determining the Income statement budget

  • Balance Sheet budgets

  • Cash flow budgets

  • Capital expenditure/fixed assets budgets

Revisions & Sensitivity Analyses

  • Use of simulation and sensitivity analysis

  • Revising estimates based on changing scenarios

Implementing the Budget

  • Budget phasing

  • Budget distribution

  • Determining the monitoring and reporting system and frequency

CONTROLLING THE BUDGET

Implementing the Budget

  • Monitoring & tracking actual results

  • Analysing variances and investigating causes

  • Presenting and reporting performance outcome

  • Adjusting/correcting operational activity and reacting to economic and business changes

Lessons Learned and Reforecasting

  • Re-forecasting techniques based on actual trends

  • Learning from current outcomes and feeding back improvements