Course Overview

What is the budgeting and forecasting process? Budget is an inherent part of the corporate financial planning process. It is therefore crucial that every business, irrespective of its size, must prepare an annual budget and review it at least every quarter.

The budget should be aligned to the overall strategic plan of the company and should include, inter alia, sales forecast, associated cost of sales, operating overheads, and capital expenditure plan for the year. Key performance indicators must be identified and monitored throughout the year.

The resulting document is the projected Financial Report which all business owners, directors, and the top management must be able to understand. Budget preparation should not be left to the CFO only. All departmental heads must share this responsibility and provide their own inputs. Implementation of code of governance in most countries requires Directors to approve the company’s budgets and therefore must take ownership of the budget document.

This Zoe course will empower the Directors, both executive and non-executive, CEOs, and other senior executives of the organisation to understand the budget statements, measure the company’s performance, and make sound decisions for the future. With the increased use of technology, the importance of an efficient Enterprise Resource Planning system and other budget templates will also be covered in the course.

Course Objectives

Objectives of this Budgeting and Forecasting Process, Tools and Techniques course are to ensure that the participants:

• Appreciate the importance of effective budget preparation and financial planning
• Understand Various sources of finance with their utilisation, based on the cost of capital
• Take sound investment decisions based on proper appraisal
• Obtain an overview of the financial statements and management reports to evaluate the company’s performance
• Review key performance analysis applicable to business
• Prepare competitor analysis, market trends, and related explanations for top-level discussions
• Understand cost behaviour and its effect on financial planning
• Assess usage of ERP systems and other budgeting tools
• Understand various types of budgets and use the one most suited to the organization
• Use financial modeling to forecast the profitability and cash flows with sensible assumptions
• Understand the different components of working capital and reduce the operating cycle
• Get equipped to manage and control budgets and forward plans
• Understand the best practice in financial planning and management

Training Methodology

This collaborative Budgeting and Forecasting Process, Tools and Techniques Course, will comprise the following training methods:

• Lectures
• Seminars & Presentations
• Group Discussions
• Assignments
• Case Studies & Functional Exercises

Zoe Talent Solutions follows the ‘Do-Review-Learn-Apply’ model.

Organisational Benefits

Companies who nominate their employees to participate in this Budgeting and Forecasting Process, Tools and Techniques Course can benefit the organisation in the following ways:

• Know the theory and merits of a proper corporate financial planning process
• Align the planning process with the overall strategic plan of the organisation
• Perform proper investment appraisal to optimize return on investment
• Estimate fund requirements and understand the concept of cost of capital for additional fundraising
• Ensure a reasonable balance between inflows and outflows of funds to maintain a healthy liquidity position
• Evaluate financial statements and measure own performance in comparison with the market trend
• Understand various types of budget and see what suits the organisation most
• Understand components of the budget with clear differentiation between revenue and capital expenditure
• Allocate budget smartly based on each division’s requirements
• Recognise cost behaviour for better analysis and identify areas for cost-cutting
• Assess working capital requirements and reduce the operating cycle
• Maintain a fine balance between inventory, debtors, and creditors

Personal Benefits

Upon completion of this Budgeting and Forecasting Process, Tools and Techniques course, individuals attending the course will be able to:

• Grasp key accounting concepts and apply the same for financial planning purposes
• Evaluate the capital structure, understand equity and debt capital, and calculate the cost of capital
• Conduct investment appraisal and prepare sensitivity analysis
• Calculate ROI and net cash flow for capital projects
• Build an Integrated Financial Model for budget preparation including cash flow forecasts
• Gain a thorough understanding of cost behaviour and learn to prepare variance analyses
• Differentiate between capital and revenue expenditure and plan accordingly
• Get an understanding of all the components of working capital and how to optimize them
• Liaise with senior management to prepare the business’s financial and strategic plans with proper assumptions
• Evaluate financial report and understand the flow of information within the statements
• Prepare ratio analyses and report to senior management
• Create opportunities for personal development and increase financial awareness

Who Should Attend?

• Chairmen
• Members of the Board of Directors
• C-suite Executives, CEOs, CFOs, and COOs
• External and Internal Auditors
• Members of the Audit Committees of the Board
• Senior Executives, Members of Management Committees
• Professionals associated with the finance function
• Shareholders and business owners eager to learn the fundamentals of Budgeting and Forecasting

Course Outline

MODULE 1: INTRODUCTION

• Overall Strategic Plan
• Mission / Vision Statement
• Majority/ Minority Shareholders
• Profitability v/s Liquidity

MODULE 2: BUDGET PROCESS AND MANAGEMENT

• Preparation of Master Budget
• Fixed v/s Flexible Budgets
• Quarterly Reviews
• Forward Planning
• Budget/ Actual Comparison
• Zero Based Budgets

MODULE 3: BUDGET STATEMENTS

• Balance Sheet
• Profit & Loss Statement
• Statement of Cash Flow
• Budget Assumptions
• Accompanying Notes

MODULE 4: WORKING CAPITAL CONTROL

• Inventory Control
• Accounts Receivable
• Accounts Payable
• Reconciliation of Sub-ledgers
• Other Current Assets & Current Liabilities
• Tax and Deferred Taxation

MODULE 5: COMPARISON WITH ACTUALS

• Ratio Analysis
• Vertical Balance Sheet & P&L Statement
• Horizontal Balance Sheet & P&L Statement
• Variance Analysis
• Price Variance
• Quantity Variance
• Mix Variance

MODULE 6: CAPITAL EXPENDITURE

• Capital Investment Appraisal
• Return on Investment
• Payback Period
• Net Present Value
• Internal Rate of Return
• Lease or Buy Decisions
• Tax Implications thereof

MODULE 7: ENTERPRISE RESOURCE PLANNING (ERP)

• Sales
• Bill of Material
• Material Management
• Procurement
• Production
• Finance

MODULE 8: OTHER BUDGETING TOOLS

• Vertex 42
• MS Office Budget Templates
• YNAB
• Quicken Budget Calculator