Finance for the Non-financial Manager

What do managers need to know of finance?

Finance is called the language of business, this is because many of the measures of success and failure in business are expressed in financial terms. As a result having a working knowledge of this language allows you to make solid and effective business decisions.

Managers 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 you understand the accounting and reporting that drives your business.

This programme delivers a deeper understanding through applied training techniques. It will provide you with the practical financial skills and techniques to ensure business success and profitability for you, your department and your business.

Who should attend

• Managers, technical managers and all those from non-financial disciplines
• Newly appointed managers, supervisors and team leaders
• New members of the management team
• Senior managers with expertise in areas other than finance
• Programme objectives

Participants attending the programme will:

• Understand the language, terminology and structure of accounts
• Learn to measure and manage cash flow to ensure financial success
• Grasp the key elements to successful planning, evaluating and controlling your budget
• Get-to-grips with the different ways to measure your operational performance in financial terms
• Understand what financial information you need to help you in decision-making and how to use it
• Develop the skills to maximise pricing your goods and services accurately
• Be able to make a positive impact on the financial efficiency and profitability of the business
• Boost your confidence when discussing financial objectives with your colleagues

What do accountants do?

• The finance function, types of accountants, financial v management accounting and the treasury function
• Understanding the role of the finance function
• How the information you provide may be used
• The basic financial statements

Balance sheets and income statements (P&L accounts)

• What they are
• What they contain
• What they can reveal – how to read them
• The accounting process

Transactions to financial statements

• What underpins the statements – accounting systems and internal controls
• 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

Accounting rules – accounting standards

• 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 IFRS’s

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

Budgeting

• Why budget? – what is 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

Costing

• The type and detail of costing very much depend on your business, e.g. manufacturing piston rings is quite different from the construction of a power plant
• Issues with overhead allocation
• Accounting for R&D

Reading financial statements

• Annual financial statements: Why they are produced, contents, what you should look for
• Learning what a set of accounts reveals about a company’s current situation, profitability and future prospects

Performance measurement – analytical reviews and ratio analysis

• ROI/ROCE
• Profitability/margins/cost control
• Sales – asset turnover
• Efficiency (asset/stock turnover, debtor/creditor days)
• ‘City’ measures
• Investment (interest /dividend cover, earnings per share, dividend yield)
• Action planning and close of course

Ralph Tiffin is a chartered accountant and registered auditor – principal of McLachlan+Tiffin. The firm has a wide range of clients and supports clients with audit and advisory work in areas such as an introduction to IFRS, ethics and fraud prevention. As a consultant he acts for many companies in the UK and overseas on subjects ranging from understanding finance and accounting for project appraisal, budgetary control systems through to fraud prevention and how proper accounting can help business.

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Project Management Skills for Everyone

• AP Moller - Maersk AS
• Apteco Ltd
• Astellas Pharma Europe Ltd
• Atlas Copco CMT
• Sigma-Aldrich Company Ltd
• Total E & P UK
• Vita (Europe) Ltd