Finance for Non-Financial Managers

• The course is designed to improve the ability of commercial managers to make appropriate commercial decisions that will benefit the business they work for and help that business meet its financial and non-financial
• The course will allow attendees to communicate more effectively with those who work in the accounts and finance teams within their organisation.
• The course will increase the attendees commercial and financial knowledge on fundamentals of finance and accounting for non-financial managers and then better understand the needs of customers and clients.

Day 1

Session 1 – Fundamentals of Financial Reporting

• Course objectives – to provide the technical skill and knowledge for non-financial staff to make appropriate financial decisions
• The key components of accounts – income, expenses, assets, liabilities and equity
• An introduction to the primary financial reporting statements and the key financial performance indicators:
  • Net income – measures of profit
  • Balance sheet – capital employed and leverage
• Fundamental financial management accounting concepts – accruals v cash-based accounting

Session 2 – Understanding Profit and Loss/Net Income

• The financial reporting period and the importance of cut-off
• Reporting revenue and key principles for revenue recognition
• Difference between assets and expenses and borderline issues such as R&D
• Expense categories – direct and overheads
• Non-recurring exceptional items

Exercise – profit and loss appraisal exercise including calculation of gross and net margins and EBITDA

Session 3 – Cash Flow Vs. Profit and Loss

• What is meant by ‘cash’ and the importance of positive operating cash flows
• Accruals compared with cash accounting with examples including credit sales and purchases and accruals and prepayments
• Other non-cash items such as provisions and depreciation

Exercise – Converting cash profit to accruals profit

Session 4 – An Introduction to the Balance Sheet

• The purpose of the balance sheet – creditor protection and the impact on reporting assets and liabilities
• Non-current assets and depreciation (amortisation)
• The net current position – working capital and the assessment of liquidity
• Management of working capital – the key issues to remember such as inventory holding periods
• Financial leverage and the concept of the ‘cost of capital’

Exercise – appraisal of a simple balance sheet – net current position, return on capital and gearing

Final Comments

• An introduction to financial project appraisal techniques such as Net Present Values (NPV), Discounted Cash Flows (DCF) and Internal Rates of Return (IRR)
• The role and use of Key Performance Indicators (including financial KPIs) and their use in business decision making

Day 2

Session 5 – Management of Working Capital

• Introduction and overview – what is meant by the working capital cycle
• Managing inventory – stock holding periods and the concept of effective inventory re-ordering
• Management of receivables – the impact of slow or non-payment
• Management of supplier payment terms (as part of overall working capital management)

Exercise – case study including the calculation of the stock holding period, debtor and creditor days and the overall working capital obligation of the business.

Session 6 – Risk Management

• Identifying and reacting to key business risks
• Currency risk and financial management issues of foreign currency cash flows
• Interest rate risk and the importance to consider the impact of delayed payment terms
• Credit risk – how should this be reflected in the contract pricing

Exercise – appraisal of different customer types which is the best for the business overall (this could include issues such as allocation of scarce resources)

Session 7 – Project Appraisal Techniques

• An introduction to common appraisal techniques, including:
  • Net present value and discounted cash flows (the time value of money impact)
  • Return on investment, internal rates of return
  • Payback periods
• Additional considerations such as foreign currency cash flows and inflation

Exercise – case study involving basic project appraisal

Session 8 – Concluding Thought

• Some other issues to consider:
  • Long-term contracts and service agreements – how revenues’ costs and profits and reported
  • Leasing agreements – the impact of capital and operating leases on commercial performance
  • Provisions and contingencies – when to recognise a liability?
• Synoptic exercise – review of example draft contract or commercial agreement with a typical customer or client

The course timings will also allow for short breaks of about 15 minutes in both the morning and afternoon sessions.

The trainer qualified as a Chartered Accountant in 1987 with a six-partner firm, Gilberts, following completion of an accountancy foundation course. In the same year, he joined Binder Hamlyn to work in their Business Development Group.

In 1990, he joined a major training company to work as a trainer on their financial and managerial accounting exam courses. During the next four years, he taught auditing, financial reporting and taxation for the ACA, ACCA, CIMA and AAT exams, he also taught the ACA multi-disciplinary case study. He mainly taught full-time courses organised for Deloitte, PWC and EY; he was also personally responsible for the ACA final level auditing paper.

In 1993, they became the director of post-examination CPD training for accountants. He was also responsible for financial training programmes for non-accountants, especially solicitors. Around this time, he also started training in International Accounting Standards, initially for Ernst & Young’s non-UK-based professional staff in Europe.

Since 1998, he has been training on a freelance basis, concentrating on financial training for both accountants and non-accountants. He also specialises in training on IFRS and US accounting standards and has presented on both subjects throughout Europe for the past 20 years. They have considerable experience in presenting training on the following topics:

• Accounting for financial instruments and insurance contracts
• IFRS reporting issues for energy and pharmaceutical businesses
• Completion accounts and the role of financial standards in corporate finance transactions

Accounting for business combinations – mergers, acquisitions and all joint and special purpose arrangements.

The course covers all the essential information needed to allow participants to perform more effectively in a commercial environment. The content will take you through all the key stages in business financial management from recording information, reporting financial information to management, understanding financial statements (P&L, cash flows etc.) to project appraisal techniques and risk management.