Budgeting and Forecasting and Behavioural Finance Fundamentals



Budgeting and Forecasting and Behavioural Finance Fundamentals

budgeting, budgeting and forecasting, accounting

‘Get on top of the bottom line’


Course description part 1 – Budgeting and Forecasting

Who is this course module suitable for?

If you are responsible for financial management as well as budgeting and forecasting within the organisation that you work for then this course module is definitely for you.

Module prerequisites

Participants should already have a good grasp of:

  • Fundamental accounting terms and principles
  • Reading and understanding of basic financial statements
  • The basic Excel functions including formulas and shortcuts

Module Objectives

In this interactive module dealing with budgeting and forecasting you will learn a number of applied techniques including:

  • How to take a disciplined approach when developing budgets
  • Forecasting results using quantitative and qualitative methods
  • How to effectively use variance analysis for performance tracking
  • How to develop concise charts and graphs to present results


What will I learn from this module?

Upon completion of this module you will be equipped to:

  • Grasp the principles behind best practice financial management.
  • Describe and expand on the importance of budgeting within a strategic framework.
  • Develop and build an effective budgeting process.
  • Discern the appropriateness of using various budgeting approaches such as zero based budgeting.
  • Better analyse revenue and cost drivers and forecast future performance.
  • Track organisational performance by using effective variance reporting.
  • Effectively use Excel functions and tools designed for the budgeting process.

Module content

The following topics are included:

  • The budgeting process within a strategic framework
  • Developing an effective budgeting process
  • Management of budget psychology
  • Practical guide to budget development
  • Common approaches to budgeting, such as incremental, value based, zero based etc.)
  • Forecasting techniques including moving average, regression analysis, etc.
  • Using variance analysis to track budget performance including waterfall charts etc.
  • Applied budgeting tools and techniques including Excel, solver, pivot tables, etc.

Module curriculum

  • Introduction


Course objectives


Download files and templates


  • Budgeting within a strategic framework


Barriers to strategy execution

Translating the strategy into a business plan

Balanced score cards

Top reasons to budget


What to watch out for

  • Developing an effective budgeting process


The master budget

3 categories of budgets

Manufacturing company example

Retail company example

Services company example


Budgeting – where to start

Steps in the budgeting process

Psychology and target setting

Top down vs. bottom up involvement

What to watch out for

  • A practical guide to developing budgets


4 approaches to budgeting

Incremental budgeting

Activity based budgeting

Value proposition budgeting

Zero based budgeting


Beyond budgeting

  • Forecasting Techniques


Cost types

Modified cost types

Cost structure and earnings volatility

Excel cost analysis model

Cost control matrix

Forecasting methods

Moving averages

Linear regression

Excel “Forecast” function

Equation of a line regression

Multiple regression overview

Multiple regression in Excel


PEST analysis

Porter’s 5 forces



  • Tracking Budget Performance with Variance Analysis


What is variance analysis

Volume vs. price

Cost variance

Variance analysis in Excel

Variance waterfall chart in Excel

Presenting results of variance analysis

Root cause analysis



  • Applied Budgeting Tools and Techniques in Excel


Goal Seek tool in Excel

Solver tool in Excel

Consolidate function in Excel

Pivot Tables overview

Setting up a Pivot Table in Excel

Pivot Table filters

Adding calculated fields to a Pivot Table

Slicer and timeline functions

Beyond Excel


  • Conclusion

Conclusion and recap of objectives

Download completed files and templates


  • Qualified Assessment

Qualified Assessment

Course Evaluation

Course description part 2 – Behavioural Finance Fundamentals

What is behavioural finance?

In essence, behavioural finance involves the study of how psychology influences the behaviour of financial practitioners.  This module deals with the various decision making biases and information processing errors that influence financial decision making.

Section 1 – Decision making biases and errors

This first section examines how behavioural finance determines market activity and the behaviour of financial practitioners.  Upon completion of this section you will have gained a good grasp of what the various behavioural biases entail including optimism and overconfidence biases.

This section includes:

  • An overview of the decision making biases and errors
  • Reflective versus reflexive decision making
  • How overconfidence and optimism impact decision making

Section 2 – Information processing errors

This section covers a broad spectrum of behavioural biases and information processing errors.  Upon completion of this section you will have acquired an in-depth understanding of the self-attribution, hindsight, confirmation and representative biases.

This section includes:

  • Self-attribution and hindsight biases
  • Confirmation and representative biases
  • Guarding against the narrative fallacy


Section 3 – How decisions are impacted by others

In this section we continue to examine the different behavioural biases and errors and learn how decision making is impacted by others.  Upon completion of this section you will have gained a thorough understanding of the anchoring bias, loss aversion as well as herding behaviour.

This section includes:

  • The anchoring bias
  • Loss aversion
  • Herding versus independent thinking

Module curriculum

  • Decision making biases and errors

Downloadable files


The psychology of markets

We all make mistakes

Which one are you?

Spock vs McCoy


CRT questions

CRT answers


Self-control is not enough

Rate your driving abilities

Recent driving ability surveys


Overconfidence and over-optimisim

Illusion of knowledge and control


  • Information processing errors

Self-attribution bias

Hindsight bias


Confirmation bias

The narrative fallacy


How does this appear?

Representative bias

How does this appear? Part 1

How does this appear? Part 2

Framing bias



  • How decisions are impacted by others

Anchoring bias


Loss aversion

Which restaurant do you go to?

Herding bias


Herding and independent thinking


Process, process, process

Prepare, plan and pre-commit



  • Qualified Assessment

Qualified Assessment

Course Evaluation


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