Cost Analysis to Support Strategic Decisions

About The Course:

Decision-making is a messy process using available data that may contain ambiguities and errors. It is important to know how costs behave so that realistic budgets and plans can be produced and appropriate financial resources made available. This seminar will challenge you to:

• To identify the key ingredients in producing a successful financial business case
• To give you the budgeting/financial skills required for better decision-making, whether for your continuing business or project or a new business venture
• Identify sources of financial and business data that provide insights into business and financial strategies when converted to budgets
• Use and build EXCEL spreadsheets for financial analysis: from the basics through complex models with Monte Carlo simulation

Organizational Impact:

• Encourages best and brightest managers to stretch themselves integrating budgeting and strategy
• Provides opportunities for testing key assumptions of corporate/financial strategy within the budget process
• Enhances organizational networks by developing and using the common language of business for resource allocation and performance assessment
• Builds practical problem solving skills for immediate use including spreadsheets and model building
• Improves recognition and implementation of financial management principles in budgeting and cost accounting

Personal Impact:

• Personal life-long learning philosophy enhanced and clarified
• Permits testing of financial impact of strategic direction
• Builds financial and analytical skills in a complex and changing environment
• Increased self-confidence with a higher level of humility (emotional intelligence) regarding financial relationships
• Long lasting relationships built for future conversations and sounding boards

Objectives:

• To identify the key ingredients in producing a successful financial business case
• To give you the budgeting/financial skills required for better decision-making, whether for your continuing business or project or a new business venture
• To explain typical costing and budgeting terminology used in business
• How to construct profit, cash and balance sheet plans/budgets.
• Evaluate variances from plan and identify corrective actions
• Understand discounted cash flow (DCF) techniques and their application to financial decision-making including risky scenarios
• Identify sources of financial and business data that provide insights into business and financial strategies when converted to budgets
• Use and build EXCEL spreadsheets for financial analysis: from the basics through complex models with Monte Carlo simulation
• Enhance personal networks of similarly minded high potential managers

Who Should Attend

• Staff who need to know more about business budgeting and costing terms and techniques to improve their communication with accounting colleagues
• Anyone from non-financial disciplines that needs to know how to financially evaluate proposed business expenditure decisions
• Managers who need to improve their skills in constructing and controlling their budget
• Supervisors from every business discipline and department who have to manage departments and plan, cost, and budget during their business careers
• Executives who need to evaluate plans for approval and variance reports for corrective action

OUTLINE

Introducing the linkages between strategy and costing

• Managing contemporary organisation
• Strategic Plan, Budgeting, Costing and Management Control
• Management Accounting for organizational control systems
• Responsibility accounting and the process-view
• The context for costing
• The Budget and its role for achieving organizational targets
• What is it the situation in your organisation?

Cost analysis and classifications

• Cost terms and classification
• Inventoriable vs. period costs
• Manufacturing vs non-manufacturing costs
• Variable vs. Fixed costs (CVP analysis)
• Direct vs. indirect cost
• Under-costing and Over-costing problems
• Problems and Examples – Case study illustration

From cost accounting to management control

• Cost allocation: traditional costing and activity-based costing (ABC)
• From traditional budgeting to Activity-based budgeting (ABB)
• Activity-based management
• Decentralized organizations
• Cost/Profit/Investment centres
• Transfer-pricing issues
• Problems and Examples – Case study illustration

Flexible budgets and variance analysis

• The features of budgetary control
• Define the master budget and explain its major benefits to an organization
• Describe the difference between a static budget and a flexible budget
• Compute flexible-budget variances and sales-volume variances
• Explain why standard costs are often used in variance analysis
• Integrate continuous improvement into variance analysis
• Case study, problems and exercises

Linking strategy to actions: Beyond costing

• Shortcomings of traditional approaches to measurement
• The Balanced Scorecard: linking Strategy to Performance Measurement
• Financial perspective, Customer perspective
• Internal Business Process perspective, Learning and growth perspective
• Developing and adapting scorecard
• Case study illustration

Certificates

A Certificate of Completion will be issued to those who attend & successfully complete the programme.

Schedule

  08:30 – 10:15 First Session

 10:15 – 10:30 Coffee Break

10:30 – 12:15 Second Session

 12:15 – 12:30 Coffee Break

12:30 – 14:00 Third Session

 14:00 – 15:00 Lunch

Training Methodology:

This interactive training course includes the following training methodologies as a percentage of the total tuition hours:

• 30% Lectures, Concepts, Role Play
• 30% Workshops & Work Presentations, Techniques
• 20% Based on Case Studies & Practical Exercises
• 20% Videos, Software & General Discussions
• Pre and Post Test

Fees

 The Fee for the seminar, including instruction materials, documentation, lunch, coffee/tea breaks & snack is: