Webinar Details
Course Description

This presentation involves the shift from historical reporting to predictive costing such as capacity-sensitive driver-based rolling financial forecasts, what-if analysis, marginal cost analysis (e.g., pricing) and target costing for new products and services.

The annual budgeting process is being criticized as obsolete soon after it is published, prone to gamesmanship, cumbersome to consolidate cost center spreadsheets, not being volume sensitive, and disconnected from the strategy. The challenge is how to resolve these deficiencies. It can be done through driver-based expense projections also useful for decision analysis.

The annual budget is often perceived as a fiscal exercise done by the accountants that is: (1) disconnected from the executive team’s strategy, and (2) does not adequately reflect future volume drivers. The budget exercise is often scorned as being obsolete soon after it is produced, and biased toward politically muscled managers who know how to overstate and “pad” their budget request. To complicate matters, traditional budgets are typically incremented or decremented by a small percent change from each cost center’s prior year’s spending level. This “use it or lose it” behavior by managers in the last few months of the fiscal year unnecessarily pumps up their prior year’s costs and consequently confuses analysis of who really needs how much budget in the coming year. 

Today organizations are shifting to rolling financial forecasts, but these projections may include similarly flawed assumptions that produce the same sarcasm about the annual budgeting process. 

This presentation provides a solution to poor budgeting and rolling financial forecast methods.

Learning Objectives
  • Identify the deficiencies with the traditional annual budget
  • Discover how to apply unit-level consumption rates with forecasts to project operational expenses.
  • Recognize how to include strategic and risk mitigation projects in expense projections.
  • Identify how to apply “predictive accounting” for capacity-sensitive driver-based rolling financial forecasts, what-if analysis, and outsourcing decisions.
  • Discover how to shift from bottom-up cost center consolidations to top down modeling
Prerequisites
  • None
Who Should Attend

CPAs, accounting/finance professionals who work with budgets and forecasts. 

Advanced Preparation

None

Presenter Details
  • Gary Cokins
    • Presenter

    Gary Cokins, CEO of "Analytics-Based Performance Management LLC": https://www.garycokins.com is an internationally recognized expert, speaker, and author in advanced cost management and performance improvement systems. He is the founder of Analytics-Based Performance Management, an advisory firm located in Cary, North Carolina. Gary received a BS degree with honors in Industrial Engineering/Operations Research from Cornell University in 1971. He received his MBA from Northwestern University’s Kellogg School of Management in 1974.

    Gary began his career as a strategic planner with FMC’s Link-Belt Division and then served as Financial Controller and Operations Manager. In 1981 Gary began... Read more

NASBA Sponsor
  • National Registry of CPE Sponsors for the QAS self-study delivery method
    Encoursa is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: NASBAregistry.org.
Date & Time
Monday, June 24, 2024

12:00 PM EDT (see additional timezones)

CPE
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