Financial Times Essential Guide to Budgeting and Forecasting, The

<p>Contents</p> <p>About the author</p> <p>Acknowledgements</p> <p>Introduction</p> <p><strong>Part 1 Preparing your budgets</strong></p> <p>&nbsp;</p> <p>1 What is the budget for?</p> <p>Introduction</p> <p>The role of budgets – why do we have them?</p> <p>1 Meeting the organisation’s objectives</p> <p>2 Planning</p> <p>3 Monitoring and controlling</p> <p>4 Co-ordinating</p> <p>5 Evaluating performance</p> <p>6 Improving performance</p> <p>7 Motivating managers</p> <p>8 Management contract</p> <p>9 Communicating</p> <p>10 Providing a basis for authorising expenditure and delegating responsibility</p> <p>11 Identifying scarce resources</p> <p>12 Allocating resources</p> <p>13 Demonstrating and delivering good corporate governance</p> <p>Linking budgets to strategy and policy</p> <p>Budgets for special purposes</p> <p>Planning periods</p> <p>&nbsp;</p> <p>2 What is a forecast and how does it differ from a budget?</p> <p>What is the difference between a budget and a forecast?</p> <p>Benefits of forecasting ‘beyond the wall’</p> <p>Forecasts, projects and contracts</p> <p>Forecasting tools and techniques</p> <p>Sales forecasting</p> <p>Quantitative forecasting using Microsoft Excel</p> <p>Useful Excel tools</p> <p>Forecast frequency and automation</p> <p>Measuring and improving forecast accuracy</p> <p>Forecast financial statements</p> <p>New product sales forecasting</p> <p>Other factors to consider in sales forecasts</p> <p>&nbsp;</p> <p>3 Essential background financial skills for budgeting </p> <p>Cheaper is not always better: cost and value in budgeting</p> <p>Accruals, cash and commitment accounting and budgeting</p> <p>Understanding profit and loss account figures</p> <p>Review of accruals accounting</p> <p>Direct and indirect methods of producing cash flow accounting</p> <p>The balance sheet</p> <p>The master budget </p> <p>Costs</p> <p>Value analysis and value engineering</p> <p>Activity based costing (ABC)</p> <p>The breakeven model</p> <p>Cost structure</p> <p>Capital expenditure planning</p> <p>&nbsp;</p> <p>4 How should the budget be built?</p> <p>Introduction</p> <p>Building budgets</p> <p>Incremental budgeting</p> <p>Zero based budgeting</p> <p>Activity based budgeting</p> <p>Should budgets be top-down or bottom-up?</p> <p>Fixed v flexible budgets</p> <p>External comparison driven budgets</p> <p>VFM, outcome orientated and evidence based budgets</p> <p>The power of evidence in protecting budgets</p> <p>Good budgeting practice and ideas for constructing a budget</p> <p>Setting budgets for contingencies</p> <p>The challenge process</p> <p>Building budgets and performance measurement</p> <p>The budget game</p> <p>Presenting budgets</p> <p>&nbsp;</p> <p>5 How should cash be budgeted and controlled?</p> <p>Planning systems and cash flow forecasting</p> <p>Managing working capital – cash and risk</p> <p>Managing trade debtors (accounts receivable)</p> <p>Managing stock (inventory)</p> <p>Managing trade creditors (accounts payable)</p> <p>Cash flow in a business </p> <p>&nbsp;</p> <p>6 How should capital expenditure be budgeted for?</p> <p>What is capital expenditure?</p> <p>The payback rule</p> <p>NPV and DCF</p> <p>Capital rationing: profitability index</p> <p>Strategic fit and ‘roadmaps’</p> <p>Sensitivity analysis</p> <p>Risk</p> <p>Post-investment appraisal</p> <p>Long-term cash flow planning</p> <p>Asset rep</p>