Enhancing Skills for Accounting, Decision Making & Financial Communication in the Public Sector

Course Overview:

Many managers and executives have heard that ‘accounting is the language of business;’ yet have not taken the opportunity to become literate. This course offers the accounting language in a structured process. Participants will gain access to the language in a variety of exercises that eventually link to the Annual Reports and to the budgets prepared and managed by the executives. No preparation is necessary except to bring an open mind and a budget document or other financial documents of interest.

By combining techniques, analysis, problems, and examples with real case studies the course provides delegates with key cost awareness and budgetary skills, which are essential in managing and controlling processes/projects in times of increasing global competition where the budgets are inextricably linked with both strategy formulation and cost analysis. This course not only presents the key financial tools generally used but also explains the broader context of how and where they are applied to obtain meaningful answers. It provides a conceptual backdrop both for the financial/economic dimensions of systematic business management and for understanding the nature of financial statements, analyzing data, planning, and controlling.

Course Objectives:

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

Understand the content of and relationships between financial statements (income statement, balance sheet, and statement of cash flows
Understand how to use financial statements to evaluate the financial performance of an organization
Understand discounted cash flow (DCF) techniques and their application to financial decision making
Understand how profit margin, asset utilization, and financial leverage are used by managers to maximize the return to investors
Understand the budgeting process, including performance evaluation
Understand cost behaviour and its impact on management decisions
Understand the need for and the methods used to allocate overhead
Communicate and question financial information effectively

Course Coverage:

Topic 1: Accounting:

An introduction
What is accounting?
What forms can accounting take?
Definition and importance of profit
Decision scenarios explored
Funding business operations
Who is interested in profit?
Cash vs. Accrual accounting
Cash flow forecasting and improvement
Accounting policies are chosen by companies
Accounting standards

Topic 2: Financial Statements, Accounting Policies, and Reporting Standards:

Income Statement – Basic Components:
Revenues & the questions
Direct/variable/product costs
Indirect/fixed/period costs
Mixed costs
Non-cash deductions: the what, the why & the how
Depreciation: various methods explored
Amortization: impairment test
Depletion: when & how
The difference between profit and cash
A closer look at costs and expenses
Profit calculations
Summarizing profit statements and extracting the key figures

Balance Sheet:

Assets – current & long term
Liabilities – current & long term
Equity – components
Capital employed - options
Managing the working capital cycle

Cash Flow Statement:

Operating sources/uses
Investing sources/uses
Financing sources/uses

Topic 3: Making and Communicating Decisions Using Budgets:

The master budget
Budgeting as a planning tool, a control mechanism, a communications device & value creation
Budgeting Sales to “drive” the correct budget
Operating budget components
Financial budget
Pro Forma Financial Statements
Cash Budgets
Capital budget
Interrelationship of Financial Projections
Dynamics and Growth of the Business System – a model review
Flexible vs. traditional budgets – the pros & cons
Variance analysis as a tool for improvement & communications
Price and volume effects within variance analysis: state of the art

Topic 4: Financial VS Management Accounting: Differences and Similarities:

Objectives of Managerial Accounting
Managerial Versus Financial Accounting:
Role of the Managerial Accountant
Financial accounting: what we show to the public
Objectives of financial accounting
Role of financial accountant
Cost terminology: variable, fixed, controllable, non-controllable, incremental, sunk, opportunity, and relevant
Cost Behaviours in Cost-Volume-Profit Scenarios: contribution margin and fixed costs
Breakeven and targeted net income scenarios
Cost/Benefit analysis

Topic 5: Ultimatum Goal of Planning – Valuation, Business Performance & Decision Making:

Definitions of Value
Responsibility centres: cost, profit, and investment
Measuring responsibility centre performance
Segment reporting internally and externally
Business Valuation from multiple perspectives
Managing Shareholder Value
Shareholder Value Creation in Perspective
Evolution of Value-Based Methodologies in planning and budgeting
Creating Value in Restructuring and Combinations beyond planning and Reporting- the case for real change!

Targeted Groups:

Members of The Operational Management Team
Managers who have responsibility for the divisional performance
Managers who have responsibility for support functions
Consultants who provide advice on systems and operations
Senior staff members of any department