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FT Essential Guide to Budgets and Forecasts: How to Deliver Accurate Numbers

FT Essential Guide to Budgets and Forecasts: How to Deliver Accurate Numbers

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  • Copyright 2013
  • Dimensions: 6" x 9"
  • Edition: 1st
  • eBook (Watermarked)
  • ISBN-10: 0-13-374484-1
  • ISBN-13: 978-0-13-374484-2

Gain the knowledge and confidence you need to build and manage budgets and forecast financial information.

This book demystifies budgets and forecasts, providing simple explanations and clear examples. It includes integrated checklists, goals and milestones, to ensure you are on target to achieve the best results.

Part of The Financial Times Essential Guides series: Task-focused and results-orientated, the essential guides are for every manager who wants to move their skills beyond the ordinary to the best.

Sample Content

Table of Contents


About the author



Part 1 Preparing your budgets

1 What is the budget for?


The role of budgets – why do we have them?

1 Meeting the organisation’s objectives

2 Planning

3 Monitoring and controlling

4 Co-ordinating

5 Evaluating performance

6 Improving performance

7 Motivating managers

8 Management contract

9 Communicating

10 Providing a basis for authorising expenditure and delegating responsibility

11 Identifying scarce resources

12 Allocating resources

13 Demonstrating and delivering good corporate governance

Linking budgets to strategy and policy

Budgets for special purposes

Planning periods

2 What is a forecast and how does it differ from a budget?

What is the difference between a budget and a forecast?

Benefits of forecasting ‘beyond the wall’

Forecasts, projects and contracts

Forecasting tools and techniques

Sales forecasting

Quantitative forecasting using Microsoft Excel

Useful Excel tools

Forecast frequency and automation

Measuring and improving forecast accuracy

Forecast financial statements

New product sales forecasting

Other factors to consider in sales forecasts

3 Essential background financial skills for budgeting

Cheaper is not always better: cost and value in budgeting

Accruals, cash and commitment accounting and budgeting

Understanding profit and loss account figures

Review of accruals accounting

Direct and indirect methods of producing cash flow accounting

The balance sheet

The master budget


Value analysis and value engineering

Activity based costing (ABC)

The breakeven model

Cost structure

Capital expenditure planning

4 How should the budget be built?


Building budgets

Incremental budgeting

Zero based budgeting

Activity based budgeting

Should budgets be top-down or bottom-up?

Fixed v flexible budgets

External comparison driven budgets

VFM, outcome orientated and evidence based budgets

The power of evidence in protecting budgets

Good budgeting practice and ideas for constructing a budget

Setting budgets for contingencies

The challenge process

Building budgets and performance measurement

The budget game

Presenting budgets

5 How should cash be budgeted and controlled?

Planning systems and cash flow forecasting

Managing working capital – cash and risk

Managing trade debtors (accounts receivable)

Managing stock (inventory)

Managing trade creditors (accounts payable)

Cash flow in a business

6 How should capital expenditure be budgeted for?

What is capital expenditure?

The payback rule


Capital rationing: profitability index

Strategic fit and ‘roadmaps’

Sensitivity analysis


Post-investment appraisal

Long-term cash flow planning

Asset replacement and enhancement

Investment in working capital

Part 2 Managing your budget and delivering performance

7 Back to basics: living within your means and delivering VFM

Budget feedback mechanism

Ratios and budgets

Managing budgets

The VFM model for managing and planning budgets

8 Making sense of standard costing and variances

Making sense of variances

Standard costing

Breakdown of variances

Practical variance analysis without standard costing

9 Risks, forecasts, balanced scorecards and KPIs

The balanced scorecard and strategy maps

KPIs and budgets

Values, mission and vision statements – and budgets

Risks and budgets

10 Delegating budgets to others

Why delegate?

Devolved or delegated budgets

McGregor’s theory X and theory Y

The key to successful delegation

11 Beyond budgeting


Are budgets bad for business?

Implementing beyond budgeting

Achieving objectives obliquely – obliquity


Part 3 Reviewing your budgeting and forecasting performance

12 What lessons have you learned?

Take action and responsibility

Personal action plans

Templates to review your learning and construct an action plan

Beyond action plans: how do you know you have been successful?



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