Fundamentals of Finance, Accounting and Budgeting

Financial management has a key role in any business, irrespective of the size of the company. It is a crucial part of organisational management and cannot be considered as a separate task to be left to finance team.

Financial management comprises of planning, organising, controlling, and monitoring financial means in order to achieve organisational objectives. This course presents the underlying framework and fundamental of Finance, Accounting and Budgeting in the context of how accounting fits into the overall budgeting process of the organization.

Important Features

The important features of the Fundamentals of Finance, Accounting and Budgeting training course are:

Understanding basics of Finance and Accounting
Generally Accepted Accounting Principles (GAAP)
Producing financial statements and analysis techniques
Preparing efficient and effective budget
Analyzing Financial indicators and using it in planning

Learning Objectives

Explain basic accounting concepts, terminology, principles, processes and procedures that govern how the financial statements are prepared. and the relevance to a business department.
Identify the basic principles used in safeguarding assets and ensuring the accuracy of accounting records.
Understand the difference between accrual and cash basis accounting.
Know the importance of accounting in running businesses.
Understand the accounting cycle.
Explain the components of an annual report.
Understand how financial information, primarily that provided by the financial statements, can be used to analyze business operations and make economic decisions.
Effectively prepare balance sheets and income statements.
Analyze a set of financial statements to evaluate the business’ financial health.
Differentiate the financing options available to a business and situations where each might be used.
Explain how to prepare a budget and effectively manage the budgeting process.
How to implement advanced planning and control techniques into your budgeting process
Know how to integrate the budgeting process with the development of the company’s long-term strategic vision.
Successfully build an integrated planning, budgeting and reporting process
Know how to provide a decision support structure that provides timely and useful information to decision makers.
Apply management tools to the budgeting process that contribute to strategic goals.
Develop ways to increase profitability and performance through streamlined planning and reporting.

Target Audience

Fundamentals of Finance, Accounting and Budgeting training is designed for wide range of professionals include:

All professionals with financial responsibility
Managers seeking to develop their understanding of the accounting methods.
All professionals with planning and budgeting responsibility
Anyone with direct planning and budgeting responsibility
Professionals responsible for management reporting
Corporate governance directors and compliance officials
Board level members who wish to develop their understanding of Budgeting &Planning
Professionals who are working with financial organizations

Training Methodology

This highly practical and results-oriented program is based on adult learning concept. This seminar will comprise a range of learning activities, including tutor presentations, with question-and-answer opportunities, demonstration and practice of analytical techniques, group exercises and discussions, using case studies and market information sources. Whilst the theoretical background to financial management will be explained and justified, the main emphasis will be on putting these into a real-world context by providing a practical ‘toolkit’ of financial techniques.

Course Contents

Day 1 – Company objectives & Fundamental of Finance & Accounting

Key Topics:
Measuring company performance
Introduction to finance: Terminology
Purpose of financial analysis and reporting
The finance role in running businesses.
Accounting terminology
Accounting as an Information System
The Accounting Equation- what does it mean?
Generally Accepted Accounting Principles
Understand the nature, purpose and role of accounting.
The accounting environment
Walking through an Annual Report
The Role of External Auditor
Users of accounting and financial information
Fundamental Accounting Concepts Cash versus Profit
Profit and profitability
Distinguish between accounting and finance.

Day 2 – Financial Statements – Understanding and Analysis

Key Topics:
Understanding the Financial Statement
Balance sheet
Profit and loss account (income statement)
Cash flow statement
Why are ratios useful?
Horizontal and trend analysis
Vertical analysis: common size statements
Building blocks analysis and reading through the numbers:
Liquidity ratios: ability to settle short-term dues.
Solvency ratios: ability to settle long-term dues.
Activity ratios: the ability to manage assets efficiently.
Profitability ratios
Limitations of financial ratio analysis

Day 3 – Management Accounting

Key Topics:
Decision-Making Technique

Cost behavior: fixed, variable, semi-fixed cost
Understanding Cost behaviour and types of costs
Plan for Cost Reduction and Profit Improvement
Costing Approaches – Full Absorption, Marginal, ABC
Cost volume profit analysis (CVP)
Break-even Analysis
Contribution Margin
Working Capital Management

Definition of working capital and working capital management
Working capital management strategies for current assets
Balancing profitability and liquidity
Working capital management strategies for current liabilities
A trade-off between profitability and certainty

Day 4 – Budgeting and the Strategic Management Framework

Key Topics:
What is the budget?
The objectives of budgeting
Types of Budgets
The budget process.
The Role of Budgeting
How to identify problems and limitation of budgetary control?
Approaches to Budget Development
Using budgets to manage organizational performance.
Finance and budgeting teams- role in supporting strategic planning.
Capital budgeting techniques & Cash Flow
Using Activity-based Budgeting
Developing the Cash Budget
Case study
Day 5 – Advanced Capital Budgeting Evaluation Techniques

Key Topics:
Business risk and cost of capital
Classifying investment projects
Analyzing investment and operating cash flows
The time value of money concept
The required rate of return
Net Present Value (NPV)
Internal Rate of Return (IRR)
Multiple internal rates of return
Modified Internal Rate of Return (MIRR)
Profitability Index (PI)
Payback period and discounted payback period
Capital rationing.
Comparing and evaluating techniques