Introduction

Project and contract managers are accountable not only for meeting technical and scheduling goals but also for achieving profitability and cost-related targets. This program explores the financial metrics relevant to project and contract management, emphasizing the financial impact of decisions and actions. Participants will develop the skills to analyze financial data, apply cost control measures, and make informed decisions that enhance project profitability and organizational value.

Course Objectives

By the end of this program, participants will be able to:

• Communicate effectively with accounting and financial personnel
• Read, understand, and analyze financial statements and data
• Apply financial tools and metrics to project scheduling and cost control
• Minimize financial risks in projects and contracts
• Evaluate project financial returns and investment performance
• Understand how finance drives organizational decisions and project evaluation

Target Audience

• Project Managers
• Contract Managers
• Cost Controllers and Project Controllers
• Finance personnel working with projects
• Procurement professionals responsible for pricing and profitability
• Any professional seeking to strengthen project financial management skills

Course Outlines (5 Days)

Day 1 – Fundamentals of Finance

• Financial accounting concepts and principles
• Reading and interpreting financial statements
• Managerial accounting
• Business case considerations
• Cost vs. revenue
• Profitability measures: ROS, ROA, ROE, EVA
• Internal Rate of Return (IRR)
• Time value of money and discounted cash flows
• Direct, indirect, fixed, variable, and semi-variable costs
• Break-even analysis

Day 2 – Contract Profitability & Pricing

• Pricing strategy and tactics
• Profit planning
• Cost-based, market-based, and value-based pricing
• Profit objectives and market structure analysis
• Risk evaluation
• Metrics for follow-on business and project sustainability

Day 3 – Asset Management: Cash is King

• Cash flow timing and management
• Accounts receivable and inventory management
• Equipment and capital assets management
• Revenue recognition and financing arrangements

Day 4 – Terms & Conditions: Best Prices

• Evaluating value, cost, and risk in contract terms
• Drafting asset-friendly terms and conditions
• Identifying and mitigating unfavorable terms
• Metrics to evaluate contractual financial impact

Day 5 – Cost Estimating: What Works Best

• Cost estimating methods and techniques
• Integrating planning and scheduling with cost estimation
• Using historical data and experience curves
• Relationship between cost estimating, pricing, and profitability