Course Description:

Managers have financial responsibilities and many have budgets to write and control and face many decisions that require forecasting and planning i.e. preparing their budgets. Using Oil and gas industry examples and exercises, this course aims to break down some of the financial barriers in an entertaining and informative style, with numerous examples. Bring your calculator. It gives an insight into the world of budgeting for financial and non-financial managers and professionals.

Course Goal:

To enhance the participants’ Knowledge, Abilities and Skills necessary to understand, prepare and use budget as a planning and control tool.

Course Objectives:

By the end of the workshop the participant will be able to:

• Define Planning and its Purpose
• Describe the Planning and Budgeting Cycle
• Explain the Strategic Planning Process
• Describe the Major Elements of the Annual Business Plan
• Understand why you must link budgeting and forecasting to planning and performance
• Describe and Perform the Basic Steps in Preparing a Comprehensive (Master) Budget
• Prepare a Capital Budget
• Determine and Investigate Budget Variances
• Understand New Trends in Budgeting

Course Outline:

1. Introduction:

• The Planning Process
• Need for Plans
• System of Plans
• Steps in Developing the Near-Term Sales Plan
• Sales Forecasting
• Measurement of Cost Behavior
• How management influences on cost behavior?
• How to measure and  Mathematically express  cost functions and use them to predict costs?

1. How to measure cost behavior using the account analysis, high-low, visual-fit, and least-squares regression Methods?
2. Budget and Budgeting:

• Definition of Budget
• Strategic Focus of Budgeting
• What are the Advantages of Budgets?
• Management Support
• Time Coverage of Budgets
• Types of Budgets

1. Budgeting and Planning:

• Strategic Planning and Budgeting Process
• Why You Must Link Budgeting and Forecasting to Planning and Performance?
• Budget Participants and Budget Preparation Procedure.
• Participative Budgeting and Importance of Communication in Effective Planning Process.
• Building the Budgeting Model
•          Prepare the budget structure
•          Write the Budget
•          Monitor

1.      Comprehensive (Master)Budgeting
2. Cash is King: How to manage this Resource

Objectives of Cashflow and Working Capital Management
Cashflow Reporting

• Capital Budgeting:

What is Capital Expenditure?
Nature of Capital Investment Decisions
What is Capital Budget?
Stages of Capital Budgeting Process
Relevant Cash Flows
Methods of Evaluating Capital Investments

1. Budgeting and control: Use of budget and budget performance analysis (variance analysis)

• Flexible Budget and Overhead Analysis

The advantages of the flexible budget approach over the static budget approach.

Prepare a performance report for both variable and fixed overhead costs using the flexible budget approach.

Use the flexible budget to prepare a variable overhead performance report containing only a spending variance.

Use the flexible budget to prepare a variable overhead performance report containing both a spending and an efficiency variance.

Explain the significance of the denominator activity figure in determining the standard cost of a unity of product.

Apply overhead cost to units of product in a standard cost system.

Compute and interpret the fixed overhead budget and volume variances.

Variances Investigation

Who Can Benefit

• Those who are, or will be, financial decision makers, working with accountants and are involved in formulating, planning and implementing business strategy
  • Those with budget responsibilities
  • Those with expertise in their own fields who need to acquire expertise in budgeting