DELIVERED BY:BSS Management ConsultancyProduced: By Sheila Elliott MBA, FCCA, LPNLP
BUDGETING MANAGEMENT TRAINING ONLINE
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COURSE OBJECTIVES
Provide participants with the knowledge &
skills to confidently prepare budgets for
their department
Provide participants with tools to monitor and control budgets
effectively.
COPYRIGHT© TO BUSINESS SERVICES SUPPORT LIMITED 2011
COURSE OBJECTIVES
Provide participants with the knowledge and skills to
confidently prepare budgets for their
department
Provide participants with tools to monitor and
control budgets effectively.
Provide practical skills to aid effective
communication with finance experts in the
organisation and outside the organisation.
COPYRIGHT© TO BUSINESS SERVICES SUPPORT LIMITED 2011
COURSE OUTCOMES
Provide participants with the knowledge and skills to
confidently prepare budgets for their
department
Provide participants with tools to monitor and
control budgets effectively.
Provide practical skills to aid effective
communication with finance experts in the
organisation and outside the organisation.
Understand practical principles for putting
together a budget
Learn how to spot weaknesses in financial performance and take
action for improvement.
COPYRIGHT© TO BUSINESS SERVICES SUPPORT LIMITED 2011
HOW TO PREPARE BUDGETDefinition of Budget
a plan expressed in money terms
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HOW TO PREPARE BUDGETAn Overview Of Budgeting As A Tool For Controlling Activities:
PLANNING
MONITORING
DECISION MAKING
CONTROL
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HOW TO PREPARE BUDGET
Benefits of Budgets:
Think Ahead
Specify Targets & Priorities
Determine Resources To Achieve Targets
Promote Accountability For Resources & Performance
Allocation Of Limited Resources Across Divisions
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HOW TO PREPARE BUDGETChallenges Associated with Budgeting:
Collating historical information & analysing them
Forecasting future events outside your control
Working collaboratively with other teams to understand the impact of your activities & actions on theirs
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HOW TO PREPARE BUDGETChallenges Associated with Budgeting:
Putting aside time to produce a robust budget
Limited expertise on the part of non-finance managers
Lack of common understanding & assumptions
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HOW TO PREPARE BUDGET
Alternative Approaches
Incremental
Zero base
Top down
Bottom up
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PLANNING AND PRODUCING YOUR BUDGETS
Best Practice Approach:
Budget setting process starts four – five
months before the start of the budget
period
Appointment of budget committee
Committee agrees budget timetable and
assumptions
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PLANNING AND PRODUCING YOUR BUDGETS
Best Practice Approach:
Budget timetable and assumptions
communicated to managers
Committee approves budget bids and
communicate decisions to managers via smt or
finance director.
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PLANNING AND PRODUCING YOUR BUDGETS
Setting Realistic Budget Assumptions:
Interest rates Government policies Inflation rates Social attitudes Unemployment GDP Taxation rates
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PLANNING AND PRODUCING YOUR BUDGETS
Questions To Be Asked In Regard PEST Analysis: page 14 ……
Politics
Economics
Social attitudes
& changes
Technology
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PLANNING AND PRODUCING YOUR BUDGETS
Producing Your Income Budgets: Grant income Voluntary grants Membership income Donations Services and products Legacy Sponsorship
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PLANNING AND PRODUCING YOUR BUDGETS
Producing your income budgets using the step by step approach on page 20
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PLANNING AND PRODUCING YOUR BUDGETS
Producing Your Expenses Budgets:
Salaries
Project Budgets
Overheads Budgets
Capital Expenditure Budget
Cashflow Budget
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CASHFLOW FORECAST IN PRACTICE
18
Details
Jan Feb Mar Apri May June July Aug Sep Oct Nov Dec
£000
£000
£000
£000
£000
£000 £000
£000
£000
£000
£000
£000
Receipts:
Grants
50 50 50 50 50 50 50 50 50 50 50
Donations 50 50 50 50 50 50 50 50 50 50 50Total 0 100 100 100 100 100 100 100 100 100 100 100Payments:Salaries 23 23 23 23 23 23 23 23 23 23 23 23Fundraising campaigns
1 1 1 1 1 1 1 1 1 1 1
Overheads 9 9 9 9 9 9 9 9 9 9 9 9Capital spending
50 5
Total 32 33 33 33 33 33 33 33 83 33 33 38Net cash balance ( the difference between total receipts and payments)
-32 67 67 67 67 67 67 67 17 67 67 62
Cash opening balance
-32 35 102 169 236 303 370 437 454 521 588
Closing balance
-32 35 102 169 236 303 370 437 454 521 588 650
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MONITORING YOUR BUDGETS
Management Accounts:
Designing The Accounts
Profiling Budgets
Recording Transactions
Producing And
Reviewing Accounts
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MANAGING YOUR BUDGETSVariance Analysis:
Causes Of VariancesPositive
variances Negative variances
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CONTROLLING YOUR BUDGETS
Management Accounts for the period 31st December 2007 Actual Budget Variance £ £ £Fundraising DepartmentSalaries 100,000 90,000 -10,000Campaigns 50,000 60,000 +10,000Leaflets/mailshot 50,000 50,000 ________ _______ 200,000 200,000
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CONTROLLING YOUR BUDGETS
Annual Budget
Budget YTD 1st January –30th June 07
Actual YTDJan- June
Variance( )= negative
Budget for the monthJune
Actual for the monthJune
Variance for the month
Forecast Outturn
Income £ £ £ £ £ £ £ £
LA Grants 50,000 25,000 15000 (10000) 4167 5000 833Publications 10,000 5,000 10,000 5000 833 1000 167
Residential Hotels
60,000 30,000 25,000 ( 5000) 5000 3000 (2000)
120,000 60,000 50,000 10,000 9000Expenses
Residential Expenses
30,000 15,000 20,000 (5000) 2500 2500 0
Salaries 70,000 35,000 30,000 5000 5833 6000 (167)Publications
printing10,000 10000 15,000 (5000) 0 0 0
Utilities 5000 2500 3000 (500) 417 500 (83)Training 2000 1000 3000 (2000) 0 200 (200)
Insurance 2000 2000 2000 0 0 0 0
Travel 1000 500 1000 (500) 200 200 0
120,000 66,000 74000 8950 9400
Surplus
CONCLUSIONS
“Helping You Build Capacity So That You Can Achieve Your Objectives And Goals”http://www.businessservicessupport.com
CONTACT DETAILS: SH EILA@ BUSINESSSERV ICESSUPPORT.COM
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