Basics of Budgeting

Course Outline

Duration: 1 Day

Description: The title of this clearly written book says it all. Virtually every aspect of budgeting from preparing income statements and company expense reports, to developing your own personal plan. Understanding the basics of budgeting will help your career and the organization you manage.

Course Contents:

Introduction

How to Use This Book

Part 1: Basic Information

Why Bother? Reasons Companies Plan

The Planning Cycle

The Basic Equation

Four Necessary Ways to Present Every Plan

Planning Philosophies

Part 2: Effective Planning in Your Organization

A Plan is a Social Document

Standards of Precision

Line and Level of Control

The Information Frontier

Rules for Jungle Fighters

Part 3: How to Build Plans Efficiently

Work Plans, Deliverables and Resources

The Secret of the Five-Minute Budget

A Resource Checklist

Part 4: How to Build a Strategic Plan

How Long and Who Does It?

The Mission Statement

Analyzing the External Environment

Analyzing Internal Capabilities

Putting It All Together

Example of a Strategic Plan

Part 5: Annual Operating Plan Preliminaries

Drafting Annual Goals

Organizational Planning

Creating a Fiscal Calendar

Fiscal Managers

Accounting System Tune-Up

Part 6: How to Budget Sales

A Five-Step Approach to Sales History

Assumptions: Improving Your Vision of the Future

Projections: Building a Chain of Inference

Example of Sales Budget from Market Share

Example of a Sales Budget from History

Part 7: How to Budge Cost of Sales

Different Approaches

Examples of an Analytical Approach

Part 8: How to Budget Labor Expense

Policy Before Planning

Appropriate Levels of Detail

Payroll Calculations

Handling Increases

Labor Planning Tips

Example of a Labor Budget

Part 9: How to Budget Other Expenses

Typical Approaches

Examples of Budgets

Part 10: How to Budget Depreciation Expense

Depreciation Expense Is Complex

Minimum Information You Will Need

Quick Estimates of Depreciation Expense

Example of a Depreciation Budget

Part 11: Balance Sheet and Cash Plans

Balance Sheet and Cash Flow Overview

An Aside to Computer Users

Example of a Balance Sheet Budget

Part 12: Budget Reviews (from Both Sides)

How to Conduct Budget Reviews

How to Chaptericipate in a Budget Review

Part 13: Planning and Executing a Budget Process

General Advice

Part 14: How to Create an Adjusted Plan

What Is an Adjusted Plan?

Adjusted Plans and Wiggle Room

Managing Adjusted Plans

Part 15: Forecasting and Controlling Results

Creating Forecasts

Using Plans to Improve Business Control

Final Thoughts