Premier Training

Prepare forecasts of income and expenditure (Press the ticks on the left to mark your understanding)

Explain responsibility centres and the relationships between departments and functions
Code, classify and allocate cost and revenue data to responsibility centres
Identify internal and external sources of information on costs, prices, demand, availability of resources and cost of finance which can be used to forecast income and expenditure
Demonstrate the use of these techniques to forecast income and expenditure:
* Indexing
* Sampling
* Moving averages
* Linear regression
* Seasonal trends
Describe the internal charges made to attribute indirect costs to production
Explain the principles and application of standard costing within the context of a budgetary control system
Describe the purpose of income and expenditure forecasts and their link to budgets
Forecast income and expenditure, using internal and external information

Prepare budgets

Identify the sources of data and planning assumptions used in budget proposals

Calculate these different types of costs:
* Direct or indirect
* Fixed, variable, semi-variable or stepped
* Capital or revenue

Schedule materials, labour and production resources to meet forecasts

Prepare relevant draft budgets for consecutive time periods from forecast data

Prepare cash flow forecasts to facilitate the achievement of organisational objectives

Assess the impact of internal and external factors on budgets

Describe the impact of the external environment and any specific external costs on budgets

Analyse critical factors affecting costs and revenues, drawing conclusions

Calculate the effect that variations in production and sales constraints will have on budgeted costs and revenues

Review and revise the validity of budgets in light of any anticipated changes

Use budgetary control to improve organisational performance

Explain the relationship between budgetary control, product lifecycles and forecasts and planning

Justify the uses of budgetary control for:
* Planning
* Co-ordinating
* Authorising
* Cost control

Explain the behavioural aspects of budgeting

Set clear targets and performance indicators to enable the budgets to be monitored

Prepare a flexed budget

Check and reconcile budget figures

Calculate variances between budget and actual income and expenditure

Report budgetary information to management in a clear and appropriate format

Plan and agree draft budgets with all parties involved

Analyse the variances explaining the impact that these will have on the organisation

Inform management of any significant issues arising from budgetary control

Present any recommendations with a clear rationale to appropriate people

Identify and evaluate options and solutions to increase profitability or reduce financial losses or exposure to risk