Financial Management for Projects and Contracts

Overview:

Introduction:

This training program 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.

Program Objectives:

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

• Enhance communication with accounting and financial personnel, and analyze accounting and financial data effectively.

• Expand project scheduling and cost control by incorporating additional financial metrics and tools to minimize project financial risk.

• Develop and apply tools for comparing project financial returns, understanding how finance influences organizational decisions and project performance evaluations.

• Learn standard financial analysis tools linking project management to corporate strategic goals, with case studies and exercises to apply these techniques effectively.

Targeted Audience:

• Project and Contract managers.

• Financial 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.

Program Outlines:

Unit 1:

Fundamentals of Finance:

• Financial accounting concepts and generally accepted accounting principles, including reading and understanding financial statements.

• Financial analysis and managerial accounting techniques, along with business case considerations.

• Exploring cost versus revenue, profitability measures such as ROS, ROA/EVA, and ROE.

• Understanding the time value of money, discounted cash flows, and fixed versus variable versus semi-variable costs.

• Examining direct versus indirect costs and conducting break-even analysis.

Unit 2:

Contract Profitability - Pricing:

• Pricing strategy and tactics, including profit planning and cost estimating.

• Exploring cost-based, market-based, and value-based pricing methods.

• Setting profit objectives and understanding market structure.

• Assessing follow-on business opportunities and managing risks effectively.

• Utilizing financial metrics like Z score for risk assessment.

Unit 3: 

Asset Management - Cash is King

• Cash and Timing of cash flows.

• Accounts receivable.

• Inventory. and 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.