Financial Management for the Technical Professional
Distance Class

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Objective:
Attend this seminar and you’ll go back to work with a practical, real world, look at cost. You will study the relationships between all aspects of the organization’s cost structure. You will understand where the operation’s cost fits in, how to manage your cost, and techniques for reducing your cost without sacrificing performance. This class was designed specifically for technical professionals.  This course is used at the University of Arizona - Tucson in the masters of engineering graduate program.

Who Should Attend:

Are you a technical professional, technical manager, engineer, or director who wants to manage the cost and finance? This is the class for you!

James C. Abbott will be your instructor. James is on the faculty at the University of Arizona in Tucson teaching graduate engineering courses. He teaches this course as part of the masters of engineering curriculum. 

Topics

Having It All
Every effective operation or business has three key components: low cost, flawless service, and short wait time. You will learn how to integrate these three vital components into your existing plan.

Finance
Review, in down-to-earth terms, all aspects of cost including the balance sheet, fixed versus variable cost, and profit and loss statements. Clear understanding of how operational costs fit into these arenas is crucial. You will learn which are critical to a management program. The purpose and use of a budget is explained. Understanding which areas are key for each accounting function, and what areas are not, builds the basis for your cost program.

Cost Buildup and the Cost System
Establishing a method for cost management requires a sophisticated approach. This approach requires an intimate understanding of all the things that add cost and cause it to fluctuate. This section will cover how to establish a cost basis for each transaction. Unit cost, favorable and unfavorable variances, standard cost, and the accounting buzzwords will be explained so that you can truly use or build your cost system.

Operational Cost Reporting
Understanding how to calculate the results is not sufficient for effective reports. The effective report prerequisites will be covered in a context of reporting the cost, and also how it impacts cost reduction. The organizational structure’s impact on cost will be explained. You will learn how to integrate reports, charts, and graphs to improve your information. There is a difference between raw data and information - you must know how to prepare reports that will get used. This section will teach you how to read the data and convert it into information for better decision-making.

Cost Management and Cost Reduction
You must understand what is required to manage your cost, and how to reduce cost without jeopardizing performance and wait time. By the end of the class, you will be able to compute your return on investment (ROI) for all purchases, projects, and improvement initiatives.

Capital Budget

This section will cover projects . Many projects require capital funding. This section will explain the time aspect on money, project acceptance decision making rules, how to track the actual results plus more. By the end of the class, you will be able to compute your return on investment for all purchases, projects, and improvement initiatives.

Financial Analysis

You must understand what is required to manage your cost, and how to reduce cost without jeopardizing performance and wait time. You will learn about the cost analytical tools for both manufacturing and service operations. Value analysis, Breakeven analysis, and Forecasting

Agenda:

This class is comprised of six sections. You can take one section that is critical to your knowledge or take the complete class.

Section 1 Financial Fundamentals

This section will cover, in down-to-earth terms, all aspects of operations, cost, and finance. This section will also cover the ins and outs of corporate accounting in practical everyday language. The topics covered in this section are:

• The Goal

• The difference between effective versus efficient

• Financial terms

• Product and process life cycle

• Double entry accounting system

Section 2 Financial Decision-making

In this section you will learn critical management techniques. Clear understanding of how costs fit into these arenas is crucial. In this section you will learn which are critical to a management program. The organizational structure’s impact on cost will be explained. Understanding which areas are key for each accounting function, and what areas are not, builds the basis for our cost program. The following are the topics covered in this section

• Division of Labor

  • Business roles

  • Decision-making (Policy, Strategy, Tactics)

  • Financial Violation of division of labor

• Business

  • Knowledge as an asset

  • Operational Base Camp

  • Operational Philosophy

• Process Principles

• Why process & Variability

Section 3 Financial Reporting

Review, in down-to-earth terms, all aspects of finance including the balance sheet, fixed versus variable cost, and profit and loss statements plus much more. You will have a clear understanding of how operational costs fit into these arenas is crucial. There is a difference between raw data and information - you must know how to prepare reports that will get used. This section will teach you how to read the data and convert it into information for better decision-making. The topics covered in this section are:

• Financial concepts and their practical use
  • Depreciation, Accrual and cash methods, Inventory handling
  • Closing of the books
• Financial Reporting
  • Income statements, balance sheets, financial testing

Section 4 Operations Tactical Reporting

You will learn which the purpose and use of operating budget is explained. You will also learn why operating budgets are not the best tool to measure the financial effectiveness of your operation. Establishing a method for operational cost management requires a sophisticated approach. This approach requires an intimate understanding of all the things that add cost and cause it to fluctuate. This section will cover how to establish a cost basis for each transaction. Unit cost, favorable and unfavorable variances, standard cost, and the accounting buzzwords will be explained so that you can truly use or build your cost system. In this section we will cover:

• The difference between financial tactical standard cost versus operational budget.
• Standard Cost methodology and where to use it
  • Standard Cost buildup
  • Earned value report
• Operating budget and where to use it

Section 5 Capital Budget

This section will cover projects. Many projects require capital funding. This section will explain the time aspect on money, project acceptance decision making rules, how to track the actual results plus more. By the end of the class, you will be able to compute your return on investment for all purchases, projects, and improvement initiatives. The topics covered in this section are:

• Future Value, Present Value, Payment annuity
• Capital Project Planning
  • Basic Project Decision
    • Return on investment
    • Payback period
  • Advanced project acceptance rules
    • Net Present Value
    • Internal Rate of Return
• Capital budget result tracking

Section 6 Financial Analysis

You must understand what is required to manage your cost, and how to reduce cost without jeopardizing performance and wait time. You will learn about the cost analytical tools. This section will cover the following topics:

• Value Analysis
• Breakeven and its use
• Forecasting and its use