Project Cost Control & Cash Flow

Course Properties

Course date: 08-10-2017
Course End Date: 12-10-2017
Location Cairo

Course Introduction

A great quality estimate is the first step in keeping the cost of your project within budget. But any first step needs a follow up to be successful. Cost control is the natural follow up for your estimates. As technical solutions are being implemented, well executed cost control gives you a greater grip on the success factors of your projects.

During the Cost Control course you will learn about the position of cost control in your projects. After you have gained a basic understanding of specific terminology and methods that are used in cost control, you will look at the cost control cycle and how it fits in the life cycle of your project. After these basics are covered, it is time to go into cost control in depth and talk about the best way to execute cost control for your projects.

After this course you will understand that cost control is cost management rather than cost reporting. You will be able to apply the principles of cost control on your projects. You can determine what factors you need to take into account when doing cost control. And you will understand what information your report needs to contain. You will also be able to read and interpret cost control reports made by others.

Budgetary control is the most widely used tool for planning and monitoring organizational activities. Importantly, the budgets are inextricably linked with both strategy formulation and cost analysis. For these reasons, it is crucial to interpret how costs behave so that realistic budgets and plans can be produced, and appropriate financial and non-financial resources can be made available to the business. Knowing some of the limitations of budgetary control, it is also imperative to complement and integrate the budgets with other organizational techniques, such as the balanced scorecard. Therefore, this course will allow you to explore the traditional tools of budgeting as well as new dynamic approaches which reflect and respond to the current complex and volatile business environment.

Course Objectives:

This course enables participants to:

  • Integrate the organization's strategic planning with budgets and processes of cost control
  • Identify the budgeting/financial skills required for better decision-making, whether for continuing business or project or a new business venture
  • Identify sources of financial and business data that provide insights into business and financial strategies when converted to budgets
  • Explore traditional versus innovative budgetary techniques
  • Explore traditional versus innovative cost analysis techniques
  • Get to know activity-based budgeting (and costing)
  • Explore capital budgeting techniques
  • Question the problems and limitations of budgetary control and look for alternative tools
  • Understand the importance of balancing financial and non-financial aspect of the business
  • Explore budgets and performance measurement as communication tools
  • Acquire an understanding of the fundamentals of effective management of cash flow, including the optimization of the level of working capital.
  • Develop practical experience of how to manage cash flow and optimize working capital to facilitate such delivery in real life business situations.
  • Increase personal financial skill levels in the field of cost control for projects.
  • Develop confidence through understanding the major drivers of successful financial performance.
  • Learn a number of technical skills, all of which lead to the ability to calculate the required figures and implement them into value adding business decisions.

This course is designed for:

  • Members of the treasury departments of companies within all industries who have responsibilities for managing cash flow and working capital.
  • Business professionals, strategic and business development planners, and project professionals who wish to refresh their understanding and enhance their skills in managing and improving cash flow and working capital performance.
  • Personnel employed in the banking, insurance and the general financial services sector where the management of cash is of prime importance.
  • Any operational, engineering, commercial, marketing, technical, or financial personnel whose work impacts on cash flow or working capital, and who wish to develop their expertise in these areas to support their current roles or for career development.

Course Contents:

Day 1

  • Accounting for Cash & Performance
    • A Performance Management Model
    • The Financial Language
    • Accounting Basics
    • Cash Flow and Working Capital
    • The 3 Key Financial Statements
    • Cash Vs Profit
    • Using financial statement to manage cash and working capital
  • Measuring & Improving Performance
    • The Impact of Inflation on Financial Performance
    • Measuring Performance: Ratios and KPIs
    • Benchmarking of Performance
    • Ratios for cash and working capital management
    • Basics of working capital management
    • Credit Risk Management
    • Financial modeling for cash and working capital management
    • Spreadsheet modeling and tools and approaches
  • Cash Management
    • Cash & Cost modeling
    • The Economic Value Model
    • The Time Value of Money and Discounted Cash Flow (DCF)
    • The Key Investment Indicators
    • Defining the Right Base Case, Sensitivity and Risk Analysis
    • Treatment of Working Capital
    • Valuing Companies and Acquisitions
    • Where Does Net Present Value (NPV) Come From?
    • The Drivers of Value
    • Learning from Experience and Delivering Project Value

Day 2

  • Optimization of Working Capital
    • Optimization not Minimization
    • Key Issues
    • Stock
    • Debtors
    • Creditors
    • Stores
    • Settlement Options
    • The Cost of Working Capital
    • Long term
    • Short term
    • Practical Examples
    • Engaging the Organization
  • Project Cost Control Techniques
    • Planning the Project Budget
    • Keeping a Track of Costs
    • Effective Time Management
    • Project Change Control
    • Use of Earned Value

Day 3

  • Methods to Effectively Estimate and Control Project Costs
    • Control baseline costs
    • Acknowledge hidden IT spending impacts
    • Understand long-term application costs
    • Understand IT cost estimation truths
    • Leverage current system investments
    • Implement short-term cost cutting measures
    • Implement long-term cost cutting measures
    • Implement pricing and chargeback mechanisms
    • Use governance to drive IT investment decisions
    • Quantify the value/benefit proposition for IT investments
  • Cost control as part of Project control & Project management
    • Definitions
    • Project control processes & objectives
    • Cost engineering vs project control
    • Cost control vs cost management

Day 4

  • The Project Control Cycle
    • Planning and Control Cycle
    • Deming Circle = Plan-Do-Check-Act
    • Project Control Cycle steps
    • Project Controller vs Project Managers role
    • Project Life Cycle
  • Budgeting, management and cost control (analysis and forecasting)
    • Work Breakdown Structures
    • Project Estimating & Accounts
    • Baseline plan
    • Cost control report
    • Cost control steps
    • Contingency
    • Risk management

Day 5

  • Change control principles
  • Cases:
    • Establish the Cost Baseline by recasting the estimate into a project budget
    • Understanding the Control Cycle by incorporating commitments and expenditures and analyzing the effects which will be reflected in the forecast
    • Understand the Control Cycle by incorporating change orders & budget shifts and analyzing the effects which will be reflected in the forecast
  • Bank Guarantees in projects
    • Overview
    • Features
    • Procedures