Overview

What do engineers and project managers need to know of finance? ‘Nothing – leave it to the accountants.’

No, no, no!

Engineers and others in technical functions must be conversant with the terminology and statements that accountants use. Technical expertise in projects, service delivery, production or other areas can only really be harnessed if the managers understand the accounting and reporting that drives businesses.

This course gives the necessary understanding to project, production and technical managers. It develops their skills in understanding financial and management accounting.

Accountants may not always like it but a major part of their work is to be the ‘servants of business’ and to gather, compile and present your figures. So you must understand the figures – they belong to you, your processes or projects. There are many reasons for maintaining accurate accounts. This course focuses on the strategic issues (those over-used words) – what figures reveal about the drivers of business and what they reveal about the day-to-day issues that accountants bother you with. The course will enhance your understanding of finance and of the accounting issues which affect your projects, production and technical areas of business.

Training objectives

This course will help you:

• understand the business world in figures – make sense of what the accountants are telling you
• appreciate what drives business – and how this affects your role in your part of the business
• relate your activities to the success of the business – through figures
• gain the skills to advance in management – financial awareness is a ‘must have’ if you are to progress in your career

Audience

All non-accountants who need an understanding of finance and accounts in order to perform their roles effectively, including:

• Engineers, technical managers, production managers, project managers and all those from non-financial disciplines.
• Newly appointed managers, supervisors and team leaders.

Format

A very practical – and enjoyable – two-day programme made up of straightforward, plain-speaking lecture sessions, interspersed with practical exercises and case studies.

Special features

For maximum benefit, this programme can be tailored to reflect your organisation’s internal budgeting and control systems. Examples can be taken from your own (or your competitors’) reports and accounts and specific regulatory or practical issues relevant to your particular sector can be highlighted.

The expert trainer

To be announced.’

Course outline

1. What do accountants do?
   • The finance function, types of accountant, financial v management accounting and the treasury function
   • Understanding the role of the finance function and how the information you provide may be used
2. The basic financial statements
   • Balance sheets and income statements (P&L accounts)
   • What they are, what they contain and above all what they can reveal – how to read them
   • The accounting process – from transactions to financial statements
   • What underpins the statements – accounting systems and internal controls
3. Why be in business? – from a financial perspective
   • The driving forces behind financial information
   • Performance measures – profitability, asset utilisation, sales and throughput, managing capital expenditure
4. Accounting rules – accounting standards
   • Accounting concepts and the accounting rules: accruals, ‘going concern’, substance over form and other ‘desirable qualities’
   • Accruals – why the timing of a transaction is so important to the finance function
   • Depreciation and amortisation – the concepts and practice
   • Accounting standards – the role of International Financial Reporting Standards
5. Cash
   • The importance of cash flow – working capital management
   • Cash flow statements – monitoring overall cash flows
   • Raising cash – levels of borrowing, gearing
   • Spending cash – an outline of capital expenditure appraisal
6. Budgeting
   • Why budget? – good and bad practice
   • Determining why budgets play a key role and should not be simply an annual ritual
   • Justifying your budgets – the link between the strategic plan and day-to-day budgeting – alignment of company culture
   • Budgets as motivators – the importance of the right culture
   • Techniques to improve budgeting – whether day-to-day or capital budgeting
7. Costing
   • The type and detail of costing very much depends on the nature of your business
   • Issues with overhead allocation
   • Accounting for R&D
8. Reading financial statements
   • Annual financial statements – why they are produced, what’s in them and what you should look for
   • Learning what a set of accounts reveals about a company’s current situation, profitability and future prospects
9. Performance measurement – analytical reviews and ratio analysis
   • ROI/ROCE
   • Profitability, margins and cost control
   • Sales – asset turnover
   • Efficiency (asset / stock turnover, debtor / creditor days)
   • ‘City’ measures
   • Investment (interest / dividend cover, earnings per share, dividend yield)