Brilliant Budgets and Forecasts

Malcolm Secrett began his professional career with BT, initially as an Electronics and Telecommunications Engineer and then in a variety of management roles. After leaving BT he established a consultancy providing financial planning and forecasting, cost and productivity analysis and improvement, analysis of work flow procedures, productivity improvements, quality systems, and the implementation of IT systems for financial planning and control. Building on an innate ability to de-mystify and explain, Malcolm has developed a uniquely pragmatic approach to aspects of management all too often regarded as the sole domain of specialists – including financial forecasting and control, conventional and activity based costing, and the day-to-day application of spreadsheets.His articles and books have been published throughout the world in English, Spanish, Arabic, Portuguese, Chinese, Russian, Ukrainian and several other languages. Malcolm is the managing director of iBase Media Services Ltd, (www.ibase.com) a software development company specialising in digital asset management and digital multi-media library systems. He also offers business consultancy with special emphasis on increasing profitability through cost management, and the avoidance of insolvency.

• Introduction Part 1: BUDGETING AND FORECASTING ESSENTIALS1. Understanding budgets and forecastsDefinitions of budgets and budget forecastsProfit and loss forecastsCash flow forecasts Spreadsheet-based budgets and forecasts for day-to-day managementForecasts – not the sole province of accountantsPlanning cyclesFixed, rolling and perpetual forecastsCan a forecast ever be right?  Does it need to be?Summary2. Using budgets and forecasts  Budget managementPlanning and ‘what if’Cost controlRaising financeCash flow controlSummaryPart 2: SPREADSHEET ESSENTIALS3. Understanding computer spreadsheets How to use the example files  What are spreadsheets?Examples of principal facilities and functionsHandy tips and shortcutsSummary4. Spreadsheet techniques for budgeting and forecasting So many ways and means  Essential practices and conventions  Example forecastsExamples of non-essential but useful techniquesSummaryPart 3: BUILDING THE ILLUSTRATION FRAMEWORK5. Preparations for the illustration budgetAre everyone’s objectives the same?Budgeting methodsReview of a budgeting process The example business ‘Widget Makers Ltd’Deciding the requirements of the example budgetA single or departmental budget?Cost categories  Cost headingsCategorising the cost headings Revenue headingsThe forecast’s duration and periodsSummary6. Creating the illustration frameworkMaking the sales forecastThe budget forecast The cash flow forecastSummaryPart 4: USING THE ILLUSTRATION FRAMEWORK7. Assembling the budgetMaking the sales forecastMaking the budget forecast Cash flow forecast adjustmentsCharts and key indicatorsKey ratiosSummary8. Causes and effects  Adjustment and refinementThe reiteration process  Examining causes and effectsSimple cause and effect Address the cause or the effect?  Gross profitability of each productSummary9. Allocation, monitoring and reviewingVisibility, clarity and relevance Budget allocationPerformance monitoring principles Setting up monitoring for the Widget Makers Ltd forecastRecording actual figuresReviewing the forecastSummary10. Further analysis  The impact of change on cash flowThe effect of rapid growth on cash flow ‘What if’ analysisSummaryPart 5: HANDLING VAT 11. VAT in the forecastWhat is VAT?  Calculating and paying VAT Cash flow forecast VAT calculationsSummaryPart 6: MEASURING AND CONTROLLING COSTS12. Measuring and controlling costsFirst things firstAbsolute figures and percentagesMeasuring production costsMeasuring manpower costsActivity based costing (ABC)SummaryPart 7: A PRACTICAL FORECASTING FRAMEWORK13. A practical forecasting frameworkFeatures and uses of the practical templateStructure of the practical templateSales and direct costsProfit and loss / budgetCash forecastAsset registerA typical month end routineSummary