Effective Budgeting

Introduction

What is a budget?

The need to plan

Basic concepts explained

Budgeting as part of the business plan

Overview of the budgeting process

Benefits of budgeting

Limitations and problems of budgeting

Budget Types

Capital, revenue and cash

How do these relate to the basics of a balance sheet, profit & loss account and cash flow statements

Concept of accruals

The Cash Budget

What are they and why are they needed.

Preparing a cash budget

Budget Preparation

The budgeting process

Structuring the budgets

The key budgetary statements

Constructing forecasts

Assumptions and limiting factors

Sensitivity analysis

Break-even analysis

Nature and behaviour of costs

Apportioning overheads

Using the 'Zero-based' approach

Incremental budgeting

Rolling budget

Reviewing the budgets

Using the Budgets to Control

Variance analysis and its importance

Identifying corrective action

Flexible and static budgets

Updating the budget - alternative approaches

Presenting and Reporting on the Budget

Giving clear information

Presenting the main variables

Getting agreement

Putting it clearly onto paper

Preparing a report

Providing the information to make decisions