FINANCE FOR THE
SUPPLY MANAGEMENT
PROFESSIONAL

PROGRAM SUMMARY

There is one area of business that every Supply Management Professional wants more information on and understanding of Finance. This 2-day program provides you all the tools you need to confidently deal with your finance staff. From terminology to best practices to examples to hands-on practice, this course has it all. 

COURSE OBJECTIVES

• To learn what is important in financial statements
• How to identify potential financial misstatements
• The "Red-Flags" of financial statement fraud
• Use ratios for quick analysis
• Total Cost of Ownership secrets & analytical tool
• Use Excel® and an analytical tool
• Case studies to demonstrate real use of the concepts

WHO SHOULD ATTEND?

Purchasing professionals who want to learn about the relationship between finance and procurement and master and/or revisit the advanced concepts of the financial side of the purchasing / procurement process.
• Financial professionals
• Operational managers
• Operational process owners
• Project managers
• Anyone tasked with the effective and efficient evaluation of potential investments, acquisitions, outsourcing agreements, or long-term contracts 
• Also this program is for those responsible for the making or evaluating management of a decision-making process and want to more effectively use Excel® and an analytical tool

TRAINING METHODOLOGY

Participants will gain from a combination of instructional methods, including lectures by an experienced practitioner and consultant, exercises, group discussions covering current practices and their relationship to the implementation of concepts and techniques discussed.

PERSONAL IMPACT

Attendees will gain by participation in this program as a result of:
• A proven set of decision-making tools and financial techniques
• To use these techniques to communicate purchasing’s contributions
• How to effectively evaluate suppliers’ financial status
• How to apply modern financial practices to purchasing
• How to build a convincing case study for decision making

COURSE SUMMARY

SESSION 1 Introduction to Accounting & Finance
• What is Accounting
• What is Finance
• How does Finance differ from Accounting
• What are the differences between Financial Accounting and Management Accounting?
• Case study of a supplier’s financial statements

SESSION 2 Financial Framework
• Management views and perspectives
• Purchasing's impact on financial statements
• Procurement - planning, forecasting and budgeting
• Opportunity and risk analysis
• Case study for Purchasing’s Decision Model

SESSION 3 Finance and Accounting Relationship
• Basic financial statements
  i) Balance Sheet ii) Income Statement iii) Cash Flow Statement
• Non Cash Deductions & its Impact
  i) Depreciation vs. Amortization vs. Depletion
• Book Value vs. Market Value
• Financial vs. Management Accounting
• Case study of a ROE, ROA & ROI calculations
• Finance Simulation to use what you have learned

SESSION 4 Cash Flow Analysis & Why is it Important?
• Dynamics of cash flow
• Cash Management vs. Working Capital Management
• Operating Cycle vs. Cash Cycle
• Cash forecasting using a Cash Budget
• Case study to analyze Supplier’s cash flow

SESSION 5 Procurement Ratios and Formulas
• What are Ratios and why are they important
• Period costs vs. Product costs
• Discount and Payment Terms
• Mark-ups vs. mark-downs
• Altman Z-Score
• Case study to calculate the probability of Supplier Bankruptcy
• What is the value of the Economic Order Quantity (EOQ)
• Suppliers Benchmarking model
• Case study to Compare Supplier ratios to industry

SESSION 6 Total Cost of Ownership (TCO)
• How to define TCO
• What do we need to calculate TCO
• Costs: Fixed vs. Variable & Tangible vs. Intangible
• Supplier Sourcing model
• Supplier Alternative Model
• Case study to calculate the better choice between two Suppliers

**Each participant will receive an Excel workbook of the case study templates (10+) to be worked through during the program