Effective Budgeting for an Effective Decision Making

Are you having problem with construction of an effective budgeting?

Are each department in your organization understand the importance of an effective budgeting?

Are they aware that budgeting is one of the key organization successes?

How do you make budgetary control effective?

The last question to ask yourself is your team know the right process of budget preparation?

We have the answers, and we have assisted many organizations out there varying sizes from state Inc. to large corporations

Budgeting at glance

Many organization use budgeting and forecasting as a means of providing and updating tactical operating plans and controlling costs, but world-class organizations use these, and other powerful tools, within a framework specifically designed to develop and execute business strategy and manage organizational performance.

But most managers are trained for their functional roles, not for finance. Yet every manager is expected to understand finances  well enough to make realistic budgets, manage cash, and hit his or her targets. This power-packed training course will provide you with the skills and tools to do this, with the aim of achieving your organization’s overall goals.

A budget is a plan to:

• control your finances
• ensure you can continue to fund your current commitments
• enable you to make confident financial decisions and meet your objectives
• ensure you have enough money for your future projects

It outlines what you will spend your money on and how that spending will be financed. However, it is not a forecast. A forecast is a prediction of the future whereas a budget is a planned outcome that your business wants to achieve.

Budgeting – The concept

i- A budget is a financial plan for future activities. It is a plan for saving, borrowing and spending.

Ii- The budget use in business often include a sales or revenue budget detail by products or services, production budget, budget for each department, subsidiaries of the company. Cash budget, capital expenditure budget etc.

Iii- The combination of all the budgets is referred to as the company’s Master Budget or Profit Plan.

Iv- It is prepared in advanced and is derived from the long-term strategy of the organization.

Value Proposition Budgeting

This approach to budgeting looks at each line-item or budget category to find out why money is being spent in certain areas and what value it provides to customers, employees, or other stakeholders.

The greatest value proposition examples usually include a headline, sub-headline, or short paragraph and a visual to add extra interest, such as an image, video, or illustration. After reading value propositions, customers should have no misunderstandings about what a brand stands for and what it can offer them.

Checking Mechanism

Outcome Based Budgeting (OBB) at glance

This approach begins with using priority outcomes as a focal point for budgeting and connects resources necessary to achieve those outcomes by using performance data and evidence to make budget decisions. In addition, this approach will foster collaboration between departments and reward services that obtain results by shifting dollars away from programs that are ineffective and focusing on the return on investment.

When allocating resources under this approach, budgeting maximizes the value that are spent:

• Funds are allocated by Priority Outcome vs Department
• Outcomes are the starting point vs. last year’s budget
• Program budget proposals vs. department budget submission
• Foster collaboration to get the most out of your services
• Budget Team Review (Office of Management and Budget)

A move to focus on outcomes rather than inputs or outputs means that the focus of agencies becomes about delivering outcomes, and for the ultimate benefit of the citizens. This then ultimately changes the relationship between federal government and agencies from one of forensic micro management of spend to one that is collaborative and focused on whether outcomes are being achieved.

This shift away from a shopping list of wishes from agencies to a prioritised budget that is focused on the delivery of outcomes is vital if government is to remain relevant to the wants and needs of the consumer – the citizen.

Our Budgeting Program at Glance

	Effective Outcome Based Budgeting (OBB) for 79 Senior Management of Majlis Agama Islam Negeri Sembilan (MAINS)
Effective Budgeting and Cash Flow Management for 20 Start-ups at MaGIC MRANTI Cyberjaya		Effective Budgeting for Decision Making for 45 Leaders in 11 subsidiaries for Permodalan Menteri Besar Kelantan (PMBK)

At FMC. We want to listen to your aspiring Budget story and growth plan for future relevance and market expansion. Trainings, advisory and consulting are our area of interest. We look forward to hear your aspiration. Reach us at admin@faisalmalikco.com