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Finance for Procurement Professionals

5 Day Training

Dates: 22 – 26 April | 03 – 07 June | 19 – 23 August 2024
Locations: Johannesburg, South Africa
Platform: Available In-Class / Online

Price: Available on request

This is a Non-accredited Course

Course Introduction

This intensive 5 day Finance for Procurement Professionals workshop explores financial tools, techniques and methods which may be used in supply chain/procurement such as investment appraisal, ratio analysis, total cost modelling and negotiation planning. A detailed accounting and finance training aimed at stakeholders or individuals who want to understand how to use financial data and indicators to assess a supplier’s position. This course will provide a working knowledge of accounting and finance, specifically aimed at how to evaluate and understand a given supplier at a point in time, as well as providing a basis to manage risk or make key decisions.

 

This Finance for Procurement Professionals course covers the subject accounting and finance including how to understand key statements such as profit and loss, balance sheet, cash flow and budgeting. It will equip you with a methodical approach to review and interrogate these, and assess and compare a supplier’s financial position and health. The course will equip you to apply some key ratios to better understand a supplier and determine where to look more deeply or what questions to ask in order to make key decisions.

Gaining knowledge to accounting and finance is a key skill for anyone working supply chain/ procurement with important suppliers, and provides a sound basis for supplier qualification and risk management.

Course Objectives

Attendance will improve the ability to utilize financial tools of analysis to help reach more robust and defensible procurement decisions.

As well as this, delegates will gain three key benefits from attending:

  • Increased confidence in their ability to contribute to investment appraisal, business cases and financial modelling

  • Increased confidence in the ability to define and measure the best outcome and measure the benefits of particular choices

  • Decreased likelihood that the procurement process will be undermined through poor decisions or that organizational risk will be increased through the selection of suppliers who subsequently fail

Key learning outcomes

By the end of this Finance for Procurement Professionals course, delegates will be able to:

  1. Demonstrate confidence in using selected tools to enhance the quality of decision-making

  2. Develop appropriate sourcing decisions based upon interpretation of supplier’s published financial accounts

  3. Participate in business case and/or investment appraisal decisions and contribute to robust decision-making

  4. Develop negotiation targets on a logical basis derived from analysis of supplier’s accounts, cost breakdowns or published industry data

  5. Describe how financial systems and reporting helps the decision-making and running of an organization

  6. Understand a supplier’s financial position, both overall, and for specific products/services, in effective procurement practice

  7. Describe the different ways procurement teams can understand the suppliers’ position and the associated difficulties

  8. Interpret key financial statements including Profit and Loss, Balance Sheet, Funds Flow/Cash Flow

  9. Be able to perform basic analysis of supplier financial information using key ratios and metrics

  10. Describe and utilize ways to obtain key supplier financial information

Who should attend?

  • Finance Practitioners

  • Procurement Practitioners

  • Supply chain professionals

  • Administrators

  • Managers

  • Controllers

  • Supervisors

  • Facilities Managers

  • Procurement Committee Members

  • Finance Committee Members

  • All those who wish to improve the utilization of financial tools and techniques in operational procurement decision making.

Training methodology

Training Methodology

Our diverse instructional approaches ensure effective learning:

– Lectures & Presentations: Engage with expert-driven, stimulating content.
– Course Material: Access well-crafted supporting resources.
– Group Work: Collaborate on discussions and case studies for practical insights.
– Workshops & Role-Play: Participate in immersive, scenario-based activities.
– Practical Application: Focus on applying theoretical knowledge in real situations.
– Post-Training Support: Receive extensive support after training for skill implementation.

Training Outline

Day 1 Session

Government Procurement System in Botswana

  • The Role of Procurement Office Department

  • Vision, Mission, Mandate, Values and Services Standards of Procurement Office Department

  • Central Purchasing Unit

  • Tendering Notices

  • Selection of Suitable Suppliers

  • Inspectorate Unit

  • Accounts Unit

Finance for procurement

  • How external events increase procurement “risk”

  • Seeking higher “prosperity” through risk reduction

  • Making procurement’s role more strategic

  • Planning and controlling the organization’s money

  • Increasing profits through reducing costs

Day 2 Session

Supplier and own financial strength

  • Predicting supplier insolvency

  • Constructing the four key financial statements

  • Understanding net profit and gross profit

  • What published accounts can (and cannot) tell us

  • Interpreting the financial statements using ratios

  • Interpret supplier’s published financial accounts

Day 3 Session

Pricing and costing

  • Cost planning to remain competitive

  • The impact of changing volumes on supplier’s costs

  • Examples of fixed, variable and hybrid costs

  • Describing the benefits of Absorption Costing, Marginal Costing and Activity Based Costing

  • Using breakeven analysis to plan for a given profit or ROI

Day 4 Session

Management of funds and resources

  • Role of Budgeting in Procurement

  • Link between finance department and Supply Chain/Procurement

  • Planning and controlling outcomes through budgets

  • Key ways to manage shorter and longer-term funds

  • Overcoming key budget problems

  • The need to consider cash flow in any project

Day 5 Session

Purchasing decision making techniques

  • Issues in capital and revenue decision making

  • With two or more projects which would be the best project to invest in?

  • The time value of money

  • NPV, IRR and payback period as investment hurdles

  • Calculation of the discount rate and the effect of risk

Key procurement lifecycle financial issues

  • The key parts of the procurement lifecycle

  • Predicting financial issues at the different lifecycle stages

  • Financial risks before creation, during and after delivery of the contract

  • Ways to eliminate procurement financial risks before signature

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