PROGRAM DETAILS

Introduction

Businesses often encounter financial difficulties as a result of no planning or an absence of effective controls. Poor, inaccurate or late information can cause havoc in a business and lead management to make wrong decisions.

This Advanced Financial Planning and Control Workshop is a training workshop that takes a practical approach to financial planning for the organisation and considers the main profit and cash drivers in a business, how these can be measured and brought under appropriate control.

Control mechanisms like the compilation of budgets and how these can best be used are investigated. Participants will be invited to share their own experiences of managing a budget and what mechanisms have been found to be most useful to avoid business and financial problems.

There will be ample opportunity to work through real-life business problems based on the participants’ and presenter’s experiences.

Aim

The workshop will enable participants to

• identify and monitor key business variables
• know what to measure and how often
• know when to take action on these trend data
• prepare properly planned budgets
• identify sources of financial and operational data to support the budgeting process

 Objectives

By the end of this workshop delegates will be able to:

• Explain basic financial concepts and budgeting methods
• Understand the main profit and cash drivers in their business
• Understand how to monitor those key drivers
• Use costing and budgeting terminology in business
• Prepare a budget
• Understand capital and revenue budgets, how to appraise capital investments, allocate overhead costs in an equitable way
• Analyse the advantages, disadvantages and limitations of different forecasting and budget preparation methods,
• Analyse budget variances, list alternative reasons for them and decide when variances should be investigated or accepted.
• Appreciate the importance of coordination, participation, communication and motivation in the development and deployment of forecasting and budgetary systems.
• On an individual basis, identify particular areas requiring attention and develop action plans for implementation in the workplace to improve performance

Target Audience

• Professionals responsible for budget preparation and management reporting
• Process owners who require a more in-depth understanding of integrated planning and budgeting techniques, along with Financial planners and cost analysts
• Anyone with direct planning and budgeting responsibility, as well as advisors, accountants and business consultants

Program Content

Day 1

SETTING THE SCENE

• Introductions and overview of participants’ existing knowledge and experience of financial planning and control
• Introduction to the workshop and its benefits for each participant
• Individual delegates’ objectives from the workshop

ESTABLISHING A SHARED VOCABULARY

• Overview of the financial statements

• Balance sheet, income statement, and the statement of cash flows, and how they interact

• Understand how these statements are put together, and their limitations
• Main accounting concepts, including accruals
• Difference between fixed and variable costs

THE NATURE, ROLE & PURPOSE of FINANCIAL PLANNING & CONTROL

• What is financial planning?
• The importance of budgeting
• What are its aims?
• How do we make budgets effective?
• The budget period
• Corporate objectives, long-term plans and budgetary plans
• Linking costing and budgeting to strategy and performance measurement
• Linking financial and operational issues

BUDGET TYPES

• Capital, revenue and cash
• How do these relate to the financial statements

 Day 2

 BUDGETARY PLANNING & CONTROL PROCESSES

• The preparation of budgets
• Co-ordination: the budget committee
• Information: the budget manual
• Early identification of the principal budget factors
• The master budget: the iterative process of budgetary planning
• Constructing forecasts
• Limiting factors
• Sensitivity analysis
• Break-even analysis
• Elements of the budgeting framework
• Key concepts and terminology
• Advantages and disadvantages: critical issues to be discussed
• Introducing cost analysis for decision-making
• Flexible and static budgets

Day 3

ALTERNATIVE FORECASTING & BUDGETING METHODS

• Making investment decisions based on risk, return and the opportunity cost of capital
• Historical extrapolation and incremental budgeting
• Research based forecasting and zero-based budgeting
• How forecasts and budgets are developed in practice

 USING BUDGETS FOR CONTROL

• The budgetary planning and control cycle
• Developing and using budgetary control reports
• Producing and using fixed budgets for planning and flexible budgets for control
• Cost, volume, profit relationships
• The key concept of contribution margin
• Direct and indirect cost – the allocation problem
• Traditional methods versus activity based costing

Day 4

 BEHAVIOURAL ASPECTS OF FINANCIAL PLANNING & CONTROL

• Why defective budgetary systems often lead to dysfunctional or misguided staff behaviour
• Implementing a system that improves staff motivation, internal communication, participation, commitment and goal congruence.

 COST MEASUREMENT AND MANAGEMENT

• Issues in Cost Determination: types of costs
• Overhead Recovery Costing
• Contribution Costing
• ABC
• Improving Cost Management

FINANCIAL DECISION MAKING

• Contribution Costing and its role in better decision making
• Relevant Costs in Decision Making: Incremental Cash Flow
• Capital Investment Appraisal

 Day 5

 BEYOND BUDGETING

• Shortcomings of traditional approaches to budgeting and measurement
• Linking financial to operational issues
• Linking strategy to performance measurement
• Financial perspective
• Customer perspective
• Internal business process perspective
• Learning and growth perspective