Workshop on Finance for Procurement Professionals

Program overview:

Procurement Professionals manage many and varied suppliers and are required to assess each of them based on financial information, such as performing financial appraisals using a range of financial performance and efficiency ratios.

It is, therefore, important that procurement professionals develop high levels of professionalism and increase their knowledge of finance as a means of promoting synergy between procurement outcomes and financial objectives of organizations. This course is designed to help participants understand the importance of finance concepts and tools, and how they impact upon the management of procurement processes and supply chains. It will also highlight the benefits of collaboration between finance and procurement functions within organizations.

For Whom:

Finance and Supply Chain Management Officers, Managers, Assistants and Specialists; User Departments, operational staff involved in developing and implementing procurement and supply chain budgets, policies and strategies; professional consultants; departmental heads and purchasing personnel and all other staff involved in Procurement.

Learning Objectives:

At the end of this training participants should be able to:

• demonstrate understanding of the scope, methodology and language of the finance function;
• use financial tools to make appropriate buying decisions;
• select and apply appropriate financial information for different purposes, such as appraisal of suppliers, capital projects and decision-making; and
• present their buying decisions more credibly to colleagues.

Course Outline:

Day I: Financial Management Tools

• Understanding Income Statements
  • Balance Sheets
  • Profit Analysis-Cost-Volume-Profit Analysis
  • Break-Even Analysis
  • Ratios
  • Evaluating Financial Management Practices
• Non-Financial Factors in Decision Making
  • What constitutes financial and non-financial factors?
  • Impact of non-financial factors on businesses.
  • Non-financial information in reporting
  • Strategic issues for investment appraisal.

Day 2: Financial Budgeting and procurement planning interface

• Procurement planning within the budgetary process -an overview
• Budgeting for operational requirements: procurement function’s inputs
• Budgeting for capital requirements: procurement function’s inputs
• Effect of actual procurement expenditure on the budget
• Contribution of procurement market research to sustainable budget
• Effect of lowest and highest prices on assets maintenance budget
• Impact of framework contract and the operational budget
• The relationship between inventory management and the annual financial statements

Day 3: CapEx (Capital Expenditure) Procurement

• Why incur capital expenditure?
• Planning for CapEx procurements – key considerations
• CapEx v/s OpEx (Operational Expenditure) procurement
• Financial treatment of capital expenditures-raise in assets; net worth
• Sources of finance for capital expenditures
• Expenses to be capitalized

 Day 4: Role of procurement functions in investment

decisions

• Investment styles
• Asset allocation
• Diversification
• Investment performance measurements
• Important factors for procurement practitioners to

note that make or break an invest

Day 5: Financial Risk in Procurement

• Risks in identifying the need and

planning the purchase

• Risks in developing specifications
• Risks in selecting the purchasing method
• Purchasing documentation risks
• Risks in inviting, clarifying and closing offers
• Risks in evaluating offers
• Selecting the successful tenderer risks
• Risks in negotiations
• Risks in Contract Management
• Financial risks in disposal

Training Methodology

Lectures, discussions, exercises, case studies, audio-visual aids will be used to reinforce these teaching/learning methods. Our facilitators are seasoned industry experts with years of experience, working as professional and trainers in these fields.