Budget management online training

DELIVERED BY:BSS Management ConsultancyProduced: By Sheila Elliott MBA, FCCA, LPNLP

BUDGETING MANAGEMENT TRAINING ONLINE

COPYRIGHT© TO BUSINESS SERVICES SUPPORT LIMITED 2011

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.


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.


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.


HOW TO PREPARE BUDGETDefinition of Budget

a plan expressed in money terms


HOW TO PREPARE BUDGETAn Overview Of Budgeting As A Tool For Controlling Activities:

PLANNING

MONITORING

DECISION MAKING

CONTROL


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


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


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


HOW TO PREPARE BUDGET

Alternative Approaches

Incremental

Zero base

Top down

Bottom up


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



Best Practice Approach:

Budget timetable and assumptions

communicated to managers

Committee approves budget bids and

communicate decisions to managers via smt or

finance director.



Setting Realistic Budget Assumptions:

Interest rates Government policies Inflation rates Social attitudes Unemployment GDP Taxation rates



Questions To Be Asked In Regard PEST Analysis: page 14 ……

Politics

Economics

Social attitudes

& changes

Technology



Producing Your Income Budgets: Grant income Voluntary grants Membership income Donations Services and products Legacy Sponsorship



Producing your income budgets using the step by step approach on page 20



Producing Your Expenses Budgets:

Salaries

Project Budgets

Overheads Budgets

Capital Expenditure Budget

Cashflow Budget


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


MONITORING YOUR BUDGETS

Management Accounts:

Designing The Accounts

Profiling Budgets

Recording Transactions

Producing And

Reviewing Accounts


MANAGING YOUR BUDGETSVariance Analysis:

Causes Of VariancesPositive

variances Negative variances


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


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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Budget management online training