Budget Accounting and Cost Controlling

SECTION 1: Introduction: The Relevance of Budgeting and Cost Management Within Strategy Execution

• The link between strategy, planning, budgeting and cost management
• Why budgeting and costing are so important to manage your company
• Towards a cross-functional process-view of the organization
• Financial vs. Managerial accounting (where you get information for decision making)
• Understand your processes: integrating financial and non-financial aspects
• Identify and discuss the key issues in terms of budget/costing for your own organization
• Discussion

SECTION 2: The Budgeting Framework and its Role Within the Management Process  

• The role of budgeting within management accounting
• The value of budgeting in your company
• Behavioral implications of budgeting
• Key concepts and terminology
• Advantages and disadvantages: critical issues to be discussed
• Overview of the financial statements – Balance sheet, Income statement and cash-flow
• Case discussion and examples

SECTION 3: Cost Management for Budgeting Purposes

• Cost concepts and terminology
• Different costs for different purposes
• Fixed vs. Variable costs: the Cost-Volume-Profit analysis model
• Contribution Margin analysis
• Manufacturing vs. non-manufacturing costs
• Period vs. Product costs: inventory evaluation and control
• Case study and discussions

SECTION 4: Case Study Day– Traditional vs. Advanced Techniques in Cost-control  

• Under-costing and over-costing: the consequences for profitability
• How to refine a costing system?
• Indirect vs. Direct costs: Traditional Cost Allocations systems vs. Activity-based Costing
• Cost drivers: linking resources, activities and management
• Introducing Activity-Based Budgeting (ABB) and Management (ABM)
• Case Study analysis
• Examples and videos

SECTION 5: Broadening the Performance Measurement Systems  

• Shortcomings of traditional approaches to budgeting and performance measurement
• Need for linking financial to operational issues
• Recent best practices: the Balanced Scorecard and Six-sigma
• Financial perspective, Customer perspective
• Internal Business Process perspective, Learning and growth perspective
• Developing and adapting the scorecard
• Video, Case study illustration and discussion