Financial Management for Projects and Contracts
Overview:
Introduction:
This training program explores essential financial strategies and techniques to enhance profitability, manage assets, and optimize contract terms. It empowers participants to make informed financial decisions that drive business success and mitigate risks. By mastering these skills, participants will improve financial planning and performance in their organizations.
Program Objectives:
At the end of this program, the participants will be able to:
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Understand key financial accounting concepts and analyze financial statements.
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Develop and implement pricing strategies that enhance contract profitability.
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Manage cash flow, accounts receivable, and other key assets efficiently.
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Evaluate and assess the impact of contract terms and conditions on cost and risk.
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Apply effective cost estimating techniques using historical data and scheduling methods.
Targeted Audience:
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Project, Contract, and Financial managers.
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Procurement managers, specialists, coordinators and administrators.
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Business analysts.
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Engineers and construction managers working on projects.
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Employees responsible for the financial aspects of project management and contract administration.
Program Outlines:
Unit 1:
Fundamentals of Finance:
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Financial accounting concepts and generally accepted accounting principles, including reading and understanding financial statements.
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Financial analysis and managerial accounting techniques, along with business case considerations.
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Exploring cost versus revenue, profitability measures such as ROS, ROA/EVA, and ROE.
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Understanding the time value of money, discounted cash flows, and fixed versus variable versus semi-variable costs.
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Examining direct versus indirect costs and conducting break-even analysis.
Unit 2:
Contract Profitability - Pricing:
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Pricing strategy and tactics, including profit planning and cost estimating.
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Exploring cost-based, market-based, and value-based pricing methods.
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Setting profit objectives and understanding market structure.
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Assessing follow-on business opportunities and managing risks effectively.
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Utilizing financial metrics like Z score for risk assessment.
Unit 3:
Asset Management - Cash is King:
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Cash and Timing of cash flows.
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Accounts receivable.
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Inventory. and Equipment.
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Revenue recognition.
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Financing arrangements.
Unit 4:
Terms & Conditions (Ts & Cs) - Best Prices:
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Value, cost, and risk.
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Asset-friendly Ts and Cs.
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Unfavourable Ts and Cs.
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Metrics to evaluate.
Unit 5:
Cost Estimating What Works Best:
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Cost estimating methods.
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Planning and scheduling.
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Making sense of historical data.
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Experience curves.
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Relationship between cost estimating and pricing.