← Financial Management for SMEs: Financial Control and Decision Making

Budgeting and Cost Control

Module 04 / 6 · 65 min

Build an operational budget from volumes and prices, classify costs, find break-even, explain variances by price and volume, and control costs without hurting the business.

In this module you will learn to

Build a monthly operational budget from sales volumes, prices and cost drivers, including tax
Classify costs as fixed or variable, direct or indirect, and controllable or not
Calculate contribution margin, break-even revenue and margin of safety
Prepare a budget vs actual report and split variances into price and volume effects
Choose cost control actions that respect the Labour Proclamation and protect quality

Built on

Erudite Africa training curriculum: Financial Management for SMEs, Level 2 Intermediate, Financial Control and Decision Making (October 2026)
Financial Reporting Proclamation No. 847/2014 and the Accounting and Auditing Board of Ethiopia (AABE) adoption of IFRS for SMEs; Commercial Code Proclamation No. 1243/2021
Federal Income Tax Proclamation No. 979/2016 as amended by Proclamation No. 1395/2025, and Council of Ministers Income Tax Regulation No. 410/2017 (depreciation rates)
VAT Proclamation No. 1341/2024, VAT Registration Directive No. 1104/2025 and Electronic Invoicing System Administration Directive No. 1142/2026
Federal Tax Administration Proclamation No. 983/2016 as amended by No. 1434/2026; Private Organization Employees' Pension Proclamation No. 1268/2022; Labour Proclamation No. 1156/2019
Published good practice on 13-week cash forecasting, working capital management, management accounts and spreadsheet controls

Examples and companies are fictional. Tax rates and rules are shown as they stood when the course was written; always check the current proclamations, directives and guidance from the Ministry of Revenues before filing, and take professional advice for your own case.