Introduction:
The planning and budgeting process in most organizations starts with the human resources (HR) department. At the same time as the sales and marketing professionals are assessing product and service mix and making short and long-term forecasts of sales demand and prices, the HR department is assessing its current level of resources and the likely level of resources required both in the short and longer-term. The HR function plays an integral role in the budgeting of costs for the whole organization. It is also responsible for the preparation and management of its departmental budget, and is accountable for the achievement of that budget. Financial awareness is therefore an essential requirement for every role at every level within the HR departments of modern business organizations.
Companies are increasingly integrating all their business processes using systems like ERP (enterprise resource planning). Each business function should therefore understand, and be able to communicate, accounting, and financial (and non-financial) information. This conference provides the required level of financial awareness and practical application for HR practitioners to appreciate accounting and finance in the broader context, and the HR function’s involvement in the organization’s budgeting and budgetary control processes, and participate in the decision-making process. It also includes the techniques required to prepare a detailed budget for the HR department itself, and the management of the HR department’s actual budget performance.
Targeted Groups:
- HR Managers
- HR Supervisors
- HR Professionals who want to develop their financial skills
- Individuals who want to gain great skills to improve their career
Conference Objectives:
At the end of this conference the participants will be able to:
- Appreciate the significant importance of cash flow (rather than profit) and discounted cash flow (DCF) in creating value for optimal decision-making to maximize shareholder wealth.
- Analyze the income statement (or profit and loss account), balance sheet, and cash flow statement, and use ratios to interpret the financial statements and be aware of their limitations.
- Appreciate the key role played by the HR department in the organization’s budget process and preparation of the master budget, and the use of techniques like activity-based budgeting (ABB).
- Use the techniques of break-even analysis, budgetary control, capital investment appraisal, capital budgeting, and variance analysis for budgetary control.
- Identify each of the costs required to manage a modern HR department to be able to prepare its annual budget and manage its actual performance.
- Use their financial knowledge for improved planning and management decision-making
Targeted Competencies:
- Reading and interpreting financial statements
- Discounted cash flow (DCF)
- Costing
- Decision-making
- Budgeting
- Cost/volume/profit (CVP) analysis
- HR and the budget process
Conference Content:
Unit 1: Company Objectives and Financial Statements:
- Measuring company performance
- Value creation and the primary objective of maximization of wealth
- Income statement (profit and loss account)
- Balance sheet
- Cash flow statement
Unit 2: Reading and Interpreting Financial Statements:
- Measurement of operating performance
- Measures of financial performance and financial position
- Risk measurement
- Limitations of ratio analysis
Unit 3: Discounted Cash Flow (DCF)
- The importance of the timing of cash flows
- Future values
- Present values
- Discounted cash flow (DCF)
Unit 4: Costing:
- Fixed costs, variable costs, and overheads
- Overhead allocation, absorption, and the use of activity-based costing (ABC)
- Expenses versus inventory (stock valuation)
- Contribution compared with profit
Unit 5: Decision-Making:
- Relevant costs
- Shut-down versus continuation
- Make versus buy
- Product mix and limited resources
- Decision trees
Unit 6: Budgeting:
- Purposes of budgeting
- The budget process
- Activity-based budgeting (ABB)
- Uncertainty and risk
- Motivation and the behavioral aspects of budgeting
- Problems in budgeting
- Non-financial performance measures
Unit 7: Cost/Volume/Profit (CVP) Analysis:
- Cost, volume, profit relationships
- Break-even analysis
- The impact of cost structure changes
- Limitations of break-even analysis
Unit 8: HR and The Budget Process:
- Organization charts
- Manpower planning
- The direct labor and indirect labor budget
- Employee benefits
- Employee records
- Payroll administration
- Redundancy costs
- Health and safety
- Employee appraisal
- Succession planning
