Dynamic Budgetary Control

In this course we look at a different approach, designed to adapt to volatility and to match the increasingly prevalent “trust and commitment” style of management. It is infinitely flexible and expressed in the language of financial management. Most budgetary control systems in the UK were introduced in an environment in which the predominant management style was “command and compliance” to which the once-a-year, for-a-year budget, expressed in the language of accounting provided a compatible approach. As the rate of change in the business environment has increased, however, this approach to budgeting has come to be seen as not only inappropriate but dangerously misleading.

This course enables the learner to

• Understand the major trends in the business environment, and the impact they are having on management in general and financial management in particular
• Establish a structure of control in order to embrace the making and monitoring of decisions
• Promote a forward looking approach to financial management
• Influence behaviour, for example team building and clarifying cultures and values
• Provide a structure through which to delegate/devolve authority in a way which ensures co-ordination, e.g. the balance of capacity and demand

Learning Outcomes
Introduction

• What is budgetary control?
• Why and how should it be customised?
• Why does budgetary control need to be dynamic?
• What is the way forward?
• What does dynamic budgetary control involve?

The principles

• What is the nature of control?
• How do we clarify financial objectives?
• What are the key forecast relationships?
• What is our model for financial management?
• How should we classify outlays?

Expectations

• How do we introduce dynamic budgetary control?
• What is the relationship between price/margin and volume?
• How do we deal with customer loyalty?
• How do we deal with receipts from customers?

Hope

• What happens as the rate of growth increases?
• How do we deal with volume inducing outlays?
• How do we deal with volume sustaining outlays?
• How do we deal with volume anticipative outlays?
• What is synthesis?

Faith

• What is mutual reinforcement?
• What is value assurance?
• How do we overcome the obstacles in our way?