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En provenance du cours de Fundação Instituto de Administração

Budgeting essentials and development

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Fundação Instituto de Administração

Budgeting essentials and development

28 notes

The Budgeting Essentials and Development course focus on an integrative and practical view of concepts, methods, and techniques to develop a budget. After finishing this course, learners will be able to: - Develop the budget with a broad view of the corporate functions; - Integrate the strategic guidelines into the discussions of budgeting process; - Structure the budget planning and development in a logical sequence - Coordinate the project of budget planning with the different areas of the company - Actively promote assumptions discussions to improve the process of developing the budget - Apply financial concepts to support the budget planning process - Design a budget monitoring and control model to support the performance management - Evaluate the performance of the company by managing the results and the budget In this course, learners will have a deeper understanding of the budgeting process, its challenges, common issues, and approaches to mitigate the problems and improve the learning curve of budget planning. It is integrative by emphasizing the transition between the corporate strategy and the budget. It is practical by following a structured process of going through a framework that illustrates and demonstrates how to analyze, develop and control the budget.

À partir de la leçon

MODULE 2 - Corporate budgeting

The corporate budgeting process begins with the strategic guidelines, goes through the discussions of what may be the influence of the guidelines on the assumptions, and culminate in supporting the budget planning process. In this module, the discussions are about the aspects related to this process. Learning objectives include understanding the link between corporate budgeting and the business unit budgeting process; aligning strategic guidelines with planning guidelines, and assessing the connections of the corporate budget to the business level budget.

Video 1 - Executive commitment4:08

Video 2 - Objectives, communications, expectations and opportunities6:14

Rencontrer les enseignants

Alberto Sansiviero Jr.
MBA
FIA Futures Studies Program
Samantha Mazzero
MSc, MBA, BS Math
FIA Profuturo – Futures Studies Program
Nelson Yoshida
Ph.D., MBA, B.Eng.
FIA Profuturo – Futures Studies Program
Roberto Dumas Damas
M.Sc., CFA
FIA Profuturo - Futures Studies Program
Fernando Fleury
Ph.D.
FIA Profuturo - Futures Studies Program

[SOUND] Hi there,

happy to see you.

We have just concluded the discussions on governance and the budgeting.

Now we start the analysis of the budget planning guidelines.

Accounting professionals define the budget as a financial plan

structured to support strategy implementation in a particular period.

The budget is more than estimation.

It includes a whole analysis of strategic directions, priority discussions and

goals to achieve.

So if we have defined the goals to achieve,

then the performance management model has to be in place.

Managers have to care about accountability to company owners.

If the strategic plan doesn't specify that managers have to deliver, then

the instrument will serve as a reference for their contribute is the budget.

One of the first guidelines for

budgeting is the general approach of how to develop it.

For instance, you can develop it in a top-down approach or

you can do it in a bottom-up development.

You can also mix the two methods, typically in most cases,

we see the top-down method, because the bottom-up

approach is more time consuming and it's never too much to remember.

A bottom-up approach would increase the workload for all managers.

And budgeting is not their core job,

despite the fact that it's important to support their core jobs.

As you're going to hear many times in this course,

the budgeting development has many reviews.

If the model of development is top-down,

there will certainly be reviews because, in many cases,

the senior executives may set goals that can not be achieved by the company.

Nothing wrong with this,

since the push is a necessary driver to stimulate managers in their creativity.

Some interesting alternatives may come out from this process.

The business of the company also has influence in the model,

adopted to develop the budget.

A manufacturing company will have a different steps,

configurations compared to a services company or a financial services provider.

A manufacturing company will have a production plan, inventory budget,

direct material budget.

A services company won't have production or inventory budget.

In this course, we'll discuss the budget for a manufacturing company and

this is because physical products have different tangible components and parts.

Imagine these components and parts flowing through the value chain of the company and

this process contributes to the understanding of the budgeting process.

Besides, the budgeting process from a manufacturing company can be adopted to

support a service component budgeting developer.

Admittedly, the same can not be easily done for a financial company.

However, let's not forget that most of the companies are manufacturers or

service providers.

Another budget planning guideline is that it should reflect the [INAUDIBLE]

strategy, considering the next physical exercise of the company.

So the budget exists to support the implementation of problems and

projects within the scope of the strategic guidelines.

Let's just emphasize that not all decisions are made at the strategic level.

Many of them are left to be made by the manager in the front line of the company.

And that's because companies' managers [INAUDIBLE] details

of the operations such as the induce of processes, the technology supplied,

and the business support systems.

The professionals dedicated to this strategy, typically board members or

shareholders' advisors, can not make decisions that which

companies operational infrastructure like the [INAUDIBLE].

There are more planning guidelines for the budgeting process.

But let's resume this video here and discuss them in the next session.

Thank you for your attention.

Please follow the steps of the course, stay tuned in, and see you soon.

[SOUND]

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