Financial Management for Projects & Contracts

Overview:

Introduction

With increasing competition and focus on corporate earnings, project and contract managers are held accountable for achieving technical and scheduling goals, meeting profitability targets, and other cost-related measures.

This training session explores the financial metrics that are commonly used and also examines the less frequently thought-of economic impact of typical operating decisions and actions. Building on your competencies, you will examine the inner mechanics of how finance and accounting can impact your project.

Course Objectives

At the end of this course, the participants will be able to:

• Communicate more effectively with accounting and financial personnel.
• Read, understand, and analyze accounting and financial data.
• Expand your work in project scheduling and cost control to encompass additional financial metrics and tools.
• Minimise project financial risk.
• Develop and apply tools for comparing project financial returns.
• Understand how finance often drives organizational decisions and evaluations of project performance.
• PROGRAMME SUMMARY:
• Learn about standard financial analysis tools in the project environment that link project management to broader corporate strategic goals. Case studies and project-related exercises give you the opportunity to apply these proven tools and techniques.
• Learn how the financial health of your organization can be significantly affected by operating decisions regarding pricing as well as terms and conditions and asset management.

Targeted Audience:

• Project managers
• Financial managers
• Contract managers
• Procurement managers and specialists
• Project coordinators and administrators
• Business analysts
• Engineers and construction managers working on projects
• Anyone else responsible for the financial aspects of project management and contract administration

Course Outlines:

Unit 1: Fundamentals of Finance:

• Financial accounting concepts.
• Generally accepted accounting principles.
• Reading and understanding financial statements.
• Financial analysis.
• Managerial accounting.
• Business case consideration.
• Cost vs. revenue.
• Profitability measures.
• ROS.
• ROA/EVA.
• ROE.
• IRR.
• Time value of money.
• Discounted cash flows and Fixed vs. variable vs. semi-variable costs.
• Direct vs. indirect costs and Break-even analysis.

Unit 2: Contract Profitability - Pricing:

• Pricing strategy and tactics.
• Profit planning.
• Cost estimating.
• Cost-based pricing.
• Market-based pricing.
• Value-based pricing.
• Profit objective.
• Market structure.
• Follow-on business.
• Risk.
• Z score.
• Market structure.
• Follow-on business.
• Risk.
• Z score .

Unit 3:  Asset Management - Cash is King

• Cash.
• Timing of cash flows.
• Accounts receivable.
• Inventory.
• Equipment.
• Revenue recognition.
• Financing arrangements.

Unit 4: Terms & Conditions (Ts & Cs) - Best Prices:

• Value, cost, and risk.
• Asset-friendly Ts and Cs.
• Unfavourable Ts and Cs.
• Metrics to evaluate.

Unit 5: Cost Estimating What Works Best:

• Cost estimating methods.
• Planning and scheduling.
• Making sense of historical data.
• Experience curves.
• Relationship between cost estimating and pricing.