Advanced Financial Management for Projects and Contracts

Introduction

In today’s business environment, project and contract managers are increasingly accountable not only for attaining technical and scheduling goals but also for achieving profit targets and monitoring cost-related metrics.

This Advanced Financial Management for Projects and Contracts training course provides insight into commonly used financial metrics and the often-overlooked financial implications of typical operational decisions. You will gain in-depth knowledge of how finance and accounting can directly impact your project outcomes by enhancing your existing skills.

Objectives

By the end of this Advanced Financial Management for Projects and Contracts course, participants will be able to:

• Enhance communication with accounting and finance teams.
• Use and analyze accounting and financial data.
• Incorporate additional financial measurements and tools into their current practices concerning project scheduling and cost control.
• Minimize the potential adverse financial effects of projects within the organization.
• Develop tools to compare different projected financial returns from a given project.
• Understand the role of finance in driving organizational decisions and evaluating project performance.

Training Methodology

• Lectures
• Case Studies
• Exercises for Financial Analysis
• Collaborations and Group Work
• Financial Tools and Techniques Workshops
• Simulations and Role Playing
• Guided Feedback Sessions and Practices

Course Outline

Unit 1: Basics of Finance

• Basic concepts in finance and accounting
• GAAP (Generally Accepted Accounting Principles)
• Readability of note disclosures related to a company’s financial statements as per GAAP requirements
• Fundamental analysis techniques used by investors to evaluate stock value
• Overview of information systems used in accounting management
• Investment appraisal: evaluating the cost, sources, and return of investments
• Cost-revenue analysis for assessing financial performance
• Effective asset utilization to generate sales revenue
• Analysis of Return on Assets (ROA) and investment decisions
• Understanding Internal Rate of Return (IRR) as an investment metric
• Discounted cash flow concepts
• Direct vs. indirect costs and their implications
• Fixed, variable, and semi-variable costs and their behavior with production levels
• Break-even analysis for determining the point where total revenues equal total expenses

Unit 2: Contract Profitability - Pricing

• Pricing decisions
• Profit planning
• Estimating costs
• Cost-Plus Pricing
• Market-Based Pricing
• Value-Based Pricing
• Objectives for profit margins
• Risk profile considerations
• Selling additional products/services (follow-on business)
• Consequences of failure to deliver on time

Unit 3: Asset Management - Cash is King

• The importance of cash management
• Timing and cash flow analysis
• Managing trade debtors
• Inventory management: stock on hand, WIP value, and stock-turns
• Income generation from tangible assets (equipment)
• Acquisition and leveraging processes for payment from future revenues or borrowed funds

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

• Understanding value, cost, and risk
• Crafting asset-friendly Ts & Cs
• Identifying and managing detrimental Ts & Cs
• Metrics to evaluate terms and conditions

Unit 5: Cost Estimating - What Works Best

• Cost estimation techniques
• Time planning and scheduling
• Processing historical data for trend analysis
• Learning curves and efficiency improvement
• Pricing decisions derived from the cost estimating process