Dynamic Budgetary Control

by David Allen
access120 days access
cpd hours4 CPD hours
price£75+vat

This course will enable you to:

  • Understand the major trends in the business environment
  • Understand the impact these trends are having on management in general and financial management in particular
  • Establish a structure of control in order to embrace the making and monitoring of decisions
  • Promote a forward-looking approach to financial management
  • Influence behaviour, for example team building, and clarify cultures and values

Most budgetary control systems in the UK were introduced in an environment in which the predominant management style was "command and compliance" to which the once-a-year, for-a-year budget, expressed in the language of accounting, provided a compatible approach. As the rate of change in the business environment has increased, however, this approach to budgeting has come to be seen as not only inappropriate but dangerously misleading.

In this course we look at a different approach, designed to adapt to volatility and to match the increasingly prevalent "trust and commitment" style of management. It is infinitely flexible and expressed in the language of financial management.

Budgets should flow from strategy, not constrain it. The pressures on budgetary control should be seen in the context of the trends affecting management generally, eg the greater emphasis on strategy, customers, devolution, co-operation and intangibles. It recognises the importance of things that cannot be measured.

Dynamic Budgetary Control ensures that opportunities for enhancing the long-term value of your business are considered properly and not evaluated on their short-term impact.

Introduction

  • What is budgetary control?
  • Why and how should it be customised?
  • Why does budgetary control need to be dynamic?
  • What is the way forward?
  • What does dynamic budgetary control involve?

The principles

  • What is the nature of control?
  • How do we clarify financial objectives?
  • What are the key forecast relationships?
  • What is our model for financial management?
  • How should we classify outlays?

Expectations

  • How do we introduce dynamic budgetary control?
  • What is the relationship between price or margin and volume?
  • How do we deal with customer loyalty?
  • How do we deal with receipts from customers?

Hope

  • What happens as the rate of growth increases?
  • How do we deal with volume inducing outlays?
  • How do we deal with volume sustaining outlays?
  • How do we deal with volume anticipative outlays?
  • What is synthesis?

Faith

  • What is mutual reinforcement?
  • What is value assurance?
  • How do we overcome the obstacles in our way?

David Allen CBE, MPhil, FCMA, FCIS was employed for many years by the Cadbury Schweppes group, holding directorships of various companies, latterly Cadbury Ltd. Whilst with the group, he coined the expression Strategic Financial Management to refer to an approach which enabled the finance function to play a proactive role in the formation and monitoring of strategy, and offered an antidote to short-termism.

During that period he was also president of the Chartered Institute of Management Accountants (CIMA), chairman of the Management Accounting stream of the International Federation of Accountants, a visiting professor at Loughborough University Business School and a member of the Review Panel of the Financial Reporting Council.

He retired from all of the above in order to concentrate on the promulgation of the concept and practice of Strategic Financial Management, through the medium of S. F. M. Ltd. This involved writing, lecturing and consulting, and led to a number of non-executive directorships in private and public sectors.

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