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.

Why Should You Attend:

To learn how calculate product, service line, distribution channel and customer profitability. Then actions that can be taken by the marketing and sales functions increase the profitability by focusing on the relatively more attractive customers to retain, grow, win back, and acquire.

Course Outline:

• The six eras of management accounting including the shift from product and service-lines to a customer-centric one.

• The continuum of direct costing from project accounting to standard costing to activity-based costing (ABC).

• Basic concepts about activity-based costing (ABC).

• Why “cost-to-serve” expenses (e.g., distribution, marketing, selling, customer service) expenses are more important than product and service-line expenses.

• How to quickly design and implement a customer profitability measurement system in weeks, not months, using rapid prototyping.

• Actions taken with the information to make customers more profitable.

What You Get:

• Training Materials

• Live Q&A Session with our Expert

• Participation Certificate

• Access to Signup Community (Optional)

• Reward Points

Who Will Benefit:

• CxOs

• CFOs

• Financial officers and controllers

• Managerial and cost accountants

• Financial and business analysts

• Budget managers

• Strategic planners

• Marketing and sales managers

• Supply chain analysts

• Risk managers

• CIO and information technology staff

• Board of Directors