Day One
Session 1

General Overview

The importance of understanding Finance
Sources of internal and external financial information
Accounting Principles (GAAP)
Accounting standards and their role
International issues in accounting standards
Effects of the convergence of accounting standards and practices
Consider the roles of the functions of an organization in the reduction and control of costs

Session 2

Understanding costs and cost behavior (including a practical exercise on break-even analysis to demonstrate the impact of procurement decisions and how B/E analysis can be used in negotiation)

Direct costs
Indirect costs
Marginal costs
Opportunity cost
Economic cost
Accounting costs
Avoidable costs
Sunk costs
Fixed costs
Semi-fixed costs (Semi-variable)
Variable costs
Break-even and contribution analysis

Session 3

Financial Statements: (including a practical exercise)

Your supplier should be in good financial health. Cash-positive firms are in a much better position to weather economic ups and downs. So, does this supplier have plenty of cash at hand, or are they overextended financially? And what information can the supplier offer to assess their financial health? And what information can the supplier offer to demonstrate their ongoing financial strength? Understanding Key Financial Statements and their Various Formats is key to this. Analysis of these statements will be carried out in session 4.

The Balance Sheet
The Profit and Loss account (Income Statement)
Cash flow statement
Five-year summary

Day Two
Session 4

Ratio Analysis: (including a practical exercise)

Carry out a financial appraisal and risk analysis of suppliers, own organisation, and customers, using a range of financial performance ratios: (including a practical exercise)

Profitability ratios
Efficiency ratios
Liquidity ratios
Investment ratios

This session is designed to demonstrate the importance of financial appraisal during the sourcing and performance management phases to make optimum buy decisions. The following ratios will be discussed

Session 5

Demand Forecasting: (including a practical exercise)

Demand forecasting can help plan for the seemingly unexpected scenarios, cut costs, and streamline existing and future manufacturing logistics planning efforts including load distribution, flexibility in case of disruptions, seasonality, inventory costs, and inbound logistics planning

Use descriptive and inferential statistics
Qualitative vs. quantitative method
Average approach
Moving average
Weighted moving average
Naïve approach
Drift method
Exponential smoothing
Judgmental methods
- Composite forecasts
- Cooke’s method
- Delphi method
- Forecast by analogy
- Scenario building
- Statistical surveys
- Technology forecasting

Session 6

Inventory Replenishment Methods: (including a practical exercise)

The importance of sound inventory management practises and the impact on financial performance of these cannot be underestimated. With procurement teams spending up to 70% of the cash within the business (much of this is inventory related) it is essential the professional fully understands the impact of over and under stocking. This session the methods which can be used to encourage best practise and delivering value from a financial point of few.

Inventory Valuation
LIFO, FIFO, Average Cost
Cost of holding inventory
- What it is and how to calculate it
- Generic formula
The cost of placing an order
- What it is and how to calculate it
- Generic formula
Reorder point strategy
Periodic review strategy
Lot-sizing methods
- Fixed order quantity
- Lot-for-lot
- Economic order quantity (EOQ)
- Period order quantity
- Periods of supply
- Least unit cost
- Least total cost
- Part period balancing

Day Three

Day three is particularly relevant to those who have project-based roles and responsibilities

Session 7

Developing and managing budget and cost management control: (including a practical exercise)

Recognize the importance of setting and controlling budgets to achieve performance targets
Describe the importance of setting a realistic budget
- Financial
- Motivational
SMART objectives
Create and present a budget to support a business plan
Cash flow forecasting

Session 8

Deliver effective capital purchasing plans: (including a practical exercise)

A fundamental activity in procurement and supply is to recommend a product or service. When these are to be capitalized it is essential the professional can evaluate the nature and importance of investment decision-making using a range of methods.

The weighted average Cost of Capital (WACC)
Accounting rate of return (ARR)
Payback period (PP)
Discounted cash flow (DCF)
Net present value (NPV)
Internal rate of return (IRR)
Non-financial considerations

Session 9

Additional Issues: (including a practical exercise)

Project based procurement requires additional skills that help the professional to evaluate the most appropriate decision-making tools for projects across a variety of sectors.

Whole life costing
Target costing
Tear-down analysis
Value engineering
Project accounting
(Sometimes referred to as job cost accounting) is the practice of creating financial reports specifically designed to track the financial progress of projects, which can then be used by managers to aid project management.

Certified Supply Chain Finance Professional Agenda

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