Finance for Procurement Professionals
5 Day Training
Dates: Available on Request
Locations: Grayston Ridge Office Park, Sandton
Platform: Available In-Class / Online
Price: Available on request
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:
Demonstrate confidence in using selected tools to enhance the quality of decision-making
Develop appropriate sourcing decisions based upon interpretation of supplier’s published financial accounts
Participate in business case and/or investment appraisal decisions and contribute to robust decision-making
Develop negotiation targets on a logical basis derived from analysis of supplier’s accounts, cost breakdowns or published industry data
Describe how financial systems and reporting helps the decision-making and running of an organization
Understand a supplier’s financial position, both overall, and for specific products/services, in effective procurement practice
Describe the different ways procurement teams can understand the suppliers’ position and the associated difficulties
Interpret key financial statements including Profit and Loss, Balance Sheet, Funds Flow/Cash Flow
Be able to perform basic analysis of supplier financial information using key ratios and metrics
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
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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