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Course Overview

All business decision-making involves analyzing situations containing varying degrees of risk. This program uncovers the essential skills required to understand the processes of budgeting and costing for better decision-making. From understanding the importance of a well-defined budget process through to the importance of how costs behave so that realistic plans can be produced.

Now more than ever, it is critical that cost estimates are closer to the out turn or end of life forecast. Gone are the times when we have the luxury of estimating costs for the delivery of a project at $1bn and the exact costs turn out to be closer to $2bn.

Projects can also no longer afford to over-run by months at a time, costing project owners millions of dollars. The industry needs more certainty in its project outcomes. Schedules need to be more realistic, estimates closer to reality and risk analysis more integrated.

This Budgeting, Costing and Decision Making examines why so many projects in an industry go over budget and are so late. The course provides the platform to re-think the approach to project risk and uncertainty, seeks to re-negotiate those tighter deadlines and schedules that are largely unrealistic and discusses areas within projects that could generate some cost savings to see you through this difficult phase.

Course objectives

Upon the completion of this course, the participant will be able to:

1. Understand the importance of a well-defined budget process
2. Learn costing and budgeting terminology used in business
3. Master techniques of full costing
4. Estimating cash flows and using NPV / IRR concepts
5. Learn how to construct profit, cash and balance sheet plans and budgets
6. Learn how to evaluate variances from plan and identify corrective actions

Delivery Method

In-person Classes

Target Audience

This program would benefit any professional who needs to improve their skills in constructing and controlling a budget

1. Financial personnel who need to evaluate plans for approval and variance reports for corrective action
2. Non-financial professionals needing to evaluate proposed business expenditure decisions and who need to know more about the budgeting process, plan, cost and budget during their business careers

Course Outline

Module 1: The need for Financial Control in business

1. Understanding accounting
2. Financial Statements
3. Management accounting vs. financial accounting
4. Cost behaviors in Cost-Volume-Profit scenarios
5. Breakeven and targeted net income scenarios
6. Benefit-cost analysis

Module 2: Ratio analysis and Cash Flow Estimation using NPV/IRR

1. Ratio Analysis
2. Corporate Strategies
3. Understanding Net present Value (NPV) and internal rate of return (IRR)
4. Estimating cash flows within the business system

Module 3: Budget Construction and Control

1. Budgeting Process
2. Capital Budgeting
3. Variance Analysis
4. Flexible Budgeting
5. Responsibility centres: cost, profit, and investment

In each Module/day a case study or examples will be presented to the participants.