The Essentials of Budgeting

Like it or not, the budget is the yardstick that top management uses to measure your actual performance. And in today’s tight economy, the manager who knows budget planning and how to apply it effectively wins hands down over the one who doesn’t. So, if you’re a new manager who’s “just a little nervous” about budget planning…or an experienced one who wants to get a lot more out of the yearly chore…or if you just want to “hold your own” with financial managers, this seminar is for you.

Objective

By the end of the program, participants will be able to:

• Define Planning and Its Purpose within Your Organization
• Describe the Planning and Budgeting Cycle
• Explain the Strategic Planning Process
• Perform a Strategic Analysis of Your External and Internal Environment
• Explain the Different Types of Budget Preparation Methods and Identify the Most Appropriate One for Your Organization
• Describe and Perform the Basic Steps in Preparing an Operating Budget
• Prepare a Departmental Spending Budget
• Identify Opportunities for Cost Reduction
• Manage Departmental Performance against Your Budget

Course Outline

Understanding the Planning and Budgeting Cycle

• Define Planning and Its Relationship to the Budgeting Process
• Explain Why Companies Budget
• Describe the Planning Cycle in a Typical Organization

Tying Strategic Planning to the Budgeting Process

• Explain the Strategic Planning Process
• Explain How Strategic Analysis Is Related to the Planning and Budgeting Process
• Perform a Strategic Analysis of the Internal and External Environment

Understanding the Budget Preparation Process

• Describe the Typical Flow of the Budgeting Cycle in an organization
• Identify the Major Contents of the Annual Business Plan
• Explain the Different Types of Budgets, Their Purpose, and Limitations
• Explain the Relationship between Budgets and Forecasts
• Identify Ways to Improve the Budgeting Process in Your Organization

How to Prepare an Operating Budget

• Explain the Sequence of Steps in Preparing an Operating Budget
• Prepare a Sales and Cost-of-Sales Budget
• Calculate Labor Hours Available and Use This Figure to Plan Headcount
• Calculate Budgeted Overhead Rates
• Budget Labor, Materials, and Overhead Costs in Total and Per Unit

Measuring Performance against the Budget

• Identify Significant Variances
• Analyze Budget Variances
• Describe the Characteristics of a Good Budget Reporting System
• Determine When a Budget Should Be Revised during the Year