Course for owners, directors, financial directors and chief accountants, who creates management reporting.
Audience
Owners, financial directors, chief accountants, specialists in the field of financial analysis, planning and reporting, sales network performance measurement, who would like to systematize knowledge in management accounting, identify functional gaps in their organizations and build sound processes for planning and performance measurement. We present the entire planning cycle — from the strategic and tactical plan to financial plan and annual budgets.
About course
The course is based on the materials of the CIPA and ACCA qualification programs, and also includes materials from international consulting projects for financial sectors in the CIS countries financed by the World Bank and the European Union.
Profitability measurement
The financial structure of the organization:
— The principles of building a financial structure;
— Types of financial responsibility centers;
— Hierarchy of financial responsibility centers;
— Budget centers and centers of financial responsibility.
Cost Centers:
— Admin: board, secretariat, audit, finance, lawyers;
— Service: personnel, IT, others;
— Support: marketing, sales management, back office;
— Profit centers: branches, divisions, sales departments;
— Special profit centers: centralized resource management;
— Investment centers.
Work in groups:
— Structure of cost centers for your organization;
— Structure of budget centers;
— Definition of budgeting items;
— Presentation and discussion of projects.
Transfer pricing is a key element of income allocation:
— An overview of the various transfer pricing models;
— The choice of transfer pricing model;
— Examples of calculation of transfer prices.
Structure of management books for banks;
— Admin cost centers: board, audit, finance, financial monitoring;
— Service cost centers: personnel, IT, others;
— Support cost centers: back-offices, risks, sales management;
— Profit centers: retail sales, corporate and treasury business;
— ALCO Profit centers: transfers, liquidity management, own investments;
— Treasury trading books: money market, FX, securities market, etc.;
— Internal allocation of capital at risk and cost of capital.
Work in groups:
— Calculation of the transfer price;
— Presentation and discussion of projects.
Cost accounting
Overview of cost accounting:
—The financial structure is the basis of cost accounting;
— Accounting for the costs of financial responsibility centers;
— Accounting for expenses in the context of budget items;
— Accounting for expenses by type of activity.
Cost allocation models:
— Activity based costing method;
— Traditional costing method;
— Base distribution of overhead costs for the two methods;
— Definition of activities;
— Determination of costs by type of activity;
— Definition of cost drivers.
Costs of profit centers and products:
— Basic costing;
— Costing for doing business;
— Full costing;
— Introduction to product costing.
Product Costing:
— Principles of building a financial structure;
— Definition of cost objects and product processes;
— Determination of the total cost by cost objects;
— Accounting and allocation of overhead costs;
— Accounting of direct costs by cost centers;
— Accounting of expenses by budget items;
— Accounting for expenses by type of activity for ABC method.
Work in groups:
— Distribution of overhead costs to profit centers;
— Calculation of the cost of profit centers;
— Calculation of the cost of products by two methods;
— Presentation and discussion of projects.
Financial planning and budgeting
Components of financial planning:
— Business strategy and strategic goals;
— Business segments and segment strategy;
— Strategic balanced indicators by segments;
— Financial goals and non-financial goals by segments;
— Tactical and marketing plans for segments;
— Financial modeling and goals testing;
— Strategic and financial planing;
— Budget directives and budgeting process;
— Monitoring the implementation of strategy, tactic and budgets.
Financial modeling and budgeting directives:
— Forecast model of balance sheet and financial results;
— Check for regulatory and other restrictions;
— Definition of key financial and non-financial indicators before tactical planning.
Tactical planing:
— Linking strategies with tactical plans and resources;
— Business plans: customers, products, channels;
— Service and support plans: accounting, risks, finances, personnel, IT;
— Monitoring of tactical plans.
Refinement and adjustment of the financial model:
— Adjustment of the forecast balance and financial results;
— Definition of budgeting directives and the beginning of the budget process.
Business plan and budgeting for a current year:;
— Budgeting and responsibility centers;
— Connection of budgets with tactical plans;
— Building a budget structure for assets and liabilities in banks;
— Budgeting structure of income and expenses;
— Budgeting of overhead costs and capital investments;
— Budgeting branches;
— Budgeting methods: flexible budgeting and budgeting “from scratch”;
— Dictionaries: codes of cost centers, codes of budget centers, codes of budgeting items and products codes.
Work in groups on dictionaries:
— Codes of budget items for assets and liabilities;
— Codes of budget items for direct revenue and expenses;
— Codes of budget overhead items;
— Codes of budget centers and budget items for products.
Results
Within the courses, participants will be able to describe various models of transfer pricing, understand the principle of creating management books for any industry. For participant, who are working in banks we are providing unique knowledge on approaches to centralize and manage market risks and liquidity risks, and help to determine approaches to fair sharing of interest margins between products, organizational units and business segments in banking institution.
In addition, participants will have the opportunity to develop the financial structure of own organization, determine the structure of cost and profit centers as well as budget centers, consider practical approaches to accounting and cost allocation. Participants will also understand the difference between the activity-based costing and traditional cost allocation method, as well as get acquainted with the methodology for determining the cost of products. In addition, participants will be provided with budgeting and tactical planning forms.
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