Course details

Overview ?

The Course

The planning and budgeting process in most organisations 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 organisation. It is also responsible for the preparation and management of its own 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 organisations.

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 seminar 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 organisation’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.

The Goals

Company objectives and financial statements
Reading and interpreting financial statements
Discounted cash flow (DCF)
Costing
Decision-making
Budgeting
Cost/volume/profit (CVP) analysis
HR and the budget process
The HR budget
Measuring HR performance
Budgetary control
Capital investment appraisal
Capital budgeting

The Process

This seminar will be presented in a participative style, and the team-based exercises and case studies will encourage discussion of the issues raised. It will also provide the opportunity to discuss and compare the HR practices of other companies with that of your own company. Many of the practical examples, for example discounted cash flow (DCF), break-even analysis, financial analysis, and budgetary control are also illustrated using Excel© spreadsheet models. This seminar provides the theoretical background to the key areas of accounting and financial management, which are put into a real world context by providing many worked examples and case studies relating to each of the topics covered, which will help you learn how to:

Appreciate the significant importance of cash flow (rather than profit) and discounted cash flow (DCF) in creating value for optimal decision-making to maximise shareholder wealth.
Analyse 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 organisation’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.

The Benefits

Following completion of this programme, you will know how to:

Use your financial knowledge for improved planning and management decision-making
Communicate with finance professionals, within and external to your organisation, to be able to become a more effective manager of the business
Liaise more effectively with other departments on financial matters
Share your financial knowledge within your own department and with other departments within your organisation
Identify and quantify each of the areas in your organisation’s budget for which the HR function has indirect responsibility
Identify and quantify each of the areas for which your HR function has direct responsibility to be able to prepare a comprehensive HR department budget
Measure HR performance

The Results

This seminar will provide you with the skills to enable you to:

Read and interpret the financial statements of a business: cash flow statement; income statement (profit and loss account); balance sheet
Evaluate business performance using appropriate techniques of financial analysis
Identify the differences between fixed and variable costs and recognise the impact of changes in cost structure on the performance of the business
Use both the traditional techniques of budgeting and activity based budgeting (ABB)
Determine the break-even point of a business using cost/volume/profit (CVP) analysis
Recognise the importance of cash flow (as distinct from profit) as a measure of business performance
Use the technique of discounted cash flow (DCF)
Evaluate new capital investment using DCF and other methods
Provide the relevant information and budgeted costs for each of the human resource-related areas within your organisation’s budget, for which the HR function has indirect responsibility
Prepare a comprehensive HR department budget, which includes each of the areas for which the HR function has direct responsibility
Compare actual versus planned performance using budgetary control and the use of flexed budgets

The Core Competencies

You will be able to put your learning into practice through:

Being able to interpret the financial reporting of a business: cash flow statement; income statement (profit and loss account); balance sheet
Using appropriate financial analysis techniques to evaluate business performance
Appreciating the important differences between fixed and variable costs
Recognising the ways in which changes in cost structure impact on the performance of the business
Applying both the traditional techniques of budgeting and activity based budgeting (ABB)
Being able to calculate the break-even point of a business
Appreciating the importance of cash flow and discounted cash flow (DCF)
Considering new capital investment in terms of creation of shareholder value
Taking a proactive role in the development of your organisation’s budget for the areas in which the HR function has indirect responsibility
Being able to construct a detailed HR departmental budget, and being accountable for its achievement
Using the budgetary control techniques of flexed budgets and variance analysis to compare actual versus planned performance

The Programme Content

Company objectives and financial statements

Measuring company performance
Value creation and the primary objective of maximisation of wealth
Income statement (profit and loss account)
Balance sheet
Cash flow statement

Reading and interpreting financial statements

Measurement of operating performance
Measures of financial performance and financial position
Risk measurement
Limitations of ratio analysis

Discounted cash flow (DCF)

The importance of the timing of cash flows
Future values
Present values
Discounted cash flow (DCF)

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

Decision-making

Relevant costs
Shut-down versus continuation
Make versus buy
Product mix and limited resources
Decision trees

Budgeting

Purposes of budgeting
The budget process
Activity based budgeting (ABB)
Uncertainty and risk
Motivation and the behavioural aspects of budgeting
Problems in budgeting
Non-financial performance measures

Cost/volume/profit (CVP) analysis

Cost, volume, profit relationships
Break-even analysis
The impact of cost structure changes
Limitations of break-even analysis

HR and the budget process

Organisation charts
Manpower planning
The direct labour and indirect labour budget
Employee benefits
Employee records
Payroll administration
Redundancy costs
Health and safety
Employee appraisal
Succession planning

The HR budget

HR staff costs
HR overhead costs
HR overhead cost allocations
Employment or outsourcing
Training and employee development
Preparation of the HR budget
Your organisation’s HR budget

Measuring HR performance

Why we measure HR
How to measure hiring and staffing
How to measure training and development
How to measure employee relations and staff retention

Budgetary control

Organisational and accounting control systems
Standard costing
Flexed budgets
Variance analysis
Types of variances and the reasons they occur
Planning and operational variances
Controllable and uncontrollable costs
Responsibility for HR budget variances

Capital investment appraisal

Methods for evaluating capital projects
Payback
Net present value
Internal rate of return
Discounted payback

Capital budgeting

Capital rationing
Ranking of investment projects
Inflation and investment
Using expected values and standard deviations to make decisio

Day 1

Day 2

Day 3

Day 4

Day 5

Training Methodology

Financial Skills for HR Professionals

Course details

Have a look too on these courses

Motivating, Coaching, Counselling & Mentoring: Practical Tools for Effective Leadership & Develop Talent

Job Evaluation & Analysis (Certified Job Analyst)

Workplace Mediation and Conflict Resolution Skills

the Art of Human Resource Management (Certified HR Professional)

Employee Relations: Motivation, Grievances and Discipline (Certified Employee Relationship Specialist)ent (Certified HR Professional)

Essential Skills for Effective Training (Certified Training Co Ordinator)

Main Pages

Quick Access

More Details

Contact Info