Financial Aspects of Project Management
Overview
The course will help you to onderstand, analyse and interpret financial statements and use them as tools in assessing the strength of businesses and business propositions. The vital difference between profit and cashflow; the components of working capital and how to manage them effectively to improve cashflow. In addition understand how pricing and cost behaviour affect gross margins and business profit; build a winning bid proposal that works for you and the client and the key financial principles of planning and delivering a successful and profitable project.
"There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things." Machiavelli's thoughts on project management 500 years ago will still resonate today with anybody involved in the planning and delivery of complex projects. Project managers are increasingly finding that they need some degree of financial "know how" to cope with the responsibilities placed upon them as rounded and seasoned commercial managers in charge of delivering important projects. Learning the key financial skills is not as difficult as many people believe and in the hands of a good manager these essential skills can provide a formidable advantage in winning, planning and delivering profitable projects.
Who Should Attend?
Project managers who are looking to build on practical commercial skills: to improve their understanding of the financial aspects of project management and how these principles work in their own projects.
Benefits To You & Your Organisation
By the end of the course you will learn about :
Accounting principles and financial statements
- Accounting concepts, principles, policies and GAAP
- Preparing and understanding the Profit & Loss Account, the Balance Sheet and the Cashflow Statement
Measuring performance
- What financial statements can and cannot tell you about a business
- Using ratio analysis and other measures to get the full picture
- Identifying Critical Success Factors and developing meaningful KPI's
Working capital management and cashflow improvement
- The vital difference between profit and cashflow
- Business funds flow and the "trade cycle"; where funds get trapped in the system
- Managing Work in Progress
- Managing client debtors and the vital role of credit management
- Improving cashflow - managing WiP and creditors
Understanding gross margin and improving profit
- Understanding gross margin and break-even
- Assessing the impact of project pricing and discounting
- Recognising the nature and impact of fixed costs and variable costs
- Profit improvement strategies
Project financial basics
- The Time-Cost-Quality triangle
- Assigning financial responsibility
- Making a business case for the project
- Project cost estimation techniques: three point method and Monte Carlo simulation
Project financial appraisal techniques
- Return on investment (ROI) approach and payback method
- Net present value (NPV) and discounted cashflow (DCF) techniques
Preparing winning bids and proposals
- Project budgeting and contingency funds
- Using Work Breakdown Schedules for accurate forecasting
- Effective pricing and discounting methods
- Managing project cashflow with milestone payments
Monitoring and controlling project costs
- Principles of effective project cost management and control
- Identifying the cause of project overspends and acting to maintain financial targets
Managing Risk
- Understanding the nature and cause of risk
- Developing effective financial risk management systems
The course is a highly interactive and participative workshop. It is designed to give the delegate the practical ability to use key financial skills in conjunction with their commercial experience to improve performance in the project management function.
The programme uses a combination of participative seminars, discussion, case studies and problem solving to ensure that delegates learn and develop the confidence to use the various financial principles and techniques.