Pp3 financial ops

FINANCIAL OPERATIONS

WHY?

AIA

To Stay in Business

Are we making Profit?

Enough to cover Payro l l & expenses

Set as ide upgrade funds

Pr ice- to stay in bus iness & del iver qual i ty Serv ice

1. Financial Systems

2. Financial Planning

4. Acquiring Capital

3. Financial Health

SOURCES & USES OF FUNDS:

>Revenues- f rom Pro jects

>Capi ta l in fus ions

>Any assoc iated bus iness ventures

>Misc Sources

FINANCIAL SYSTEMS

1

SOU RCES & U SES OF FU NDS :

>D i rec t Exp enses - sup po r t p ro jec t ac t i v i t i e s-S a la ry & Co nsu l tan t

expenses

>S a la ry - t im e cha rg ed b y S t aff

>C o nsu l tan t s - o u t s i d e se rv i ce w / mark -up

>O ther expenses - t r ave l , pho ne , e t c .

FINANCIAL SYSTEMS


>InDirect Expenses- Ind i rect ly supports Pro j

-payrol l burden & Admin costs

>Payrol l burden- benefits

>Admin costs-management, market ingeduc. Etc

-rents, taxes (2.5 x DSE)

FINANCIAL SYSTEMS


>Profit - Difference of Revenues & expenses

-susta ins pract ice-cushion for lean t imes-reward-funds for investments

FINANCIAL SYSTEMS

ACCOUNTING SYSTEMS:

Project & Genera l Account ing

Proj . Acctg- Labor , other d i rect expenses+overhead Expense (%)or 150%

Gen. acctg- keeping acctg books

FINANCIAL SYSTEMS

ACCOUNTING SYSTEMS:

>Chart of accounts

>Assets-Owned by the Fi rm (Car, Condo, Office, equipts)

>Liabi l i t ies - What firm owes to others

FINANCIAL SYSTEMS

ACCOUNTING SYSTEMS:

>Net worth - what firm owes to the owner

>Revenue- Money earned dur ing acctg per iod

>Expenses- Fi rm’s Cost to produce revenue

>Profit or Loss - d ifference of revenue & expenses

FINANCIAL SYSTEMS

ACCOUNTING METHODS:

>CASH & ACCRUAL METHOD

>Cash Methods- what cash on hand

>Accrual Method- Revenue records even not yet received

FINANCIAL SYSTEMS

FINANCIAL REPORTS:

>Income Statement- moving picture-summary for a part icu lar

per iod

>Balance Sheet – snapshot-net worth at a part icu lar

t ime

FINANCIAL SYSTEMS

-Sets Target for pr ic ing & operat ing costs

-Effect ive way- sets guideposts: profit targets , staffing needs

& costs in provid ing the level of service

FINANCIAL PLANNING:

2

Business P lanning

>Act ive instead of React ive

“Big Picture”

>Annual Financia l P lans:-Revenue Pro ject ion-Staffing Plan-Overhead Cost-Profit p lan

FINANCIAL PLANNING:

Revenue Pro ject ion

- OnGoing Pro j

- Upcoming Pro j

F INANCIAL PLANNING:

Staffing Expense

- Current

- Future Hi r ing

FINANCIAL PLANNING:

-Cont inual ly assess to stay heal thy-to achieve pract ice goals

>To check: 1. stay in Bus iness2. fu lfi l l promise to c l ients3. fu lfi l l own pract ice4. provide rewards-performance,

r isk , ROI

F INANCIAL HEALTH:

3

3 Factors in Financia l P lanning:

F INANCIAL HEALTH:

PROFITABILITY

LIQUIDITY

SOLVENCY

3 Factors in Fiancia l P lanning:

-Profitabi l i ty -excess of revenue over expenses

-L iquid i ty - convert asset to cash w/ ease

-Solvency- meet finacia l obl igat ions as they come

FINANCIAL HEALTH:

PROFITABIL ITY:

>Requi red at 3 leve ls-For Fi rm, prov ide cap i ta l investment ,

endure downward cyc le , susta in growth-For people , Rewards- For Owners - ROI

>Pro ject cyc le : Per form serv ices , invo ice, co l lec t cash

>Office Loss - due to fa i lure in one of i t .

FINANCIAL HEALTH:

LIQUIDITY:

> Fixed Asset (Long Term)- Real Estate, Car , Equipments

> Current Asset (Short term)- Cash

Key? Invoic ing regular ly

FINANCIAL HEALTH:

SOLVENCY:

>Feels the day to day effect of Profitabi l i ty & L iqu id i ty

>Solvency & Profitabi l i ty – c losely re lated

FINANCIAL HEALTH:

MANAGING CASH:

>Solvency is a problem

>Cash F low Project ion:- Forecast Bi l l ing- Forecast col lect ions,

other investments- Forecast payments- Combine & calculate

FINANCIAL HEALTH:

MANAGING CASH:

>Cash F low Controls : (Act ive)- cont inu ing flow of pro j- B i l l ing prompt ly- monitor receipts &

pursui t col lect ions- Contro l d isbursements- prepare cash budgets

FINANCIAL HEALTH:

MANAGING CASH:

>Cash F low Controls : (Act ive)- cont inu ing flow of pro j- B i l l ing prompt ly- monitor receipts &

pursui t col lect ions- Contro l d isbursements- prepare cash budgets

FINANCIAL HEALTH:

MANAGING CASH:

-Cont inu ing defici t so lut ion:- refinance a major asset- adding capi ta l- reta in earn ings than

distr ibute- Contro l d isbursements- defer expenditures

FINANCIAL HEALTH:

FINANCIAL STRENGTH:

>Working Capi ta l - min. amount to susta in the firm in bus iness

> Receivables- largest current asset

>Profit- 10-15%

FINANCIAL HEALTH:

MANAGING OVERHEAD:

- 30-40% of Revenues

- 100-200% of Di rect Salary

- Too High > No Profit

- Too Low > affects Ql ty

FINANCIAL HEALTH:

MANAGING PROJECT EXPENSES :

> D i rec t sa la ry , consu l tants , t rave l , rep ro , mode l s , e tc . d i rec t l y re la ted to Pro j .

> Impt Pr i nc ip l es :- U t i l i za t i on> keep ing s taff engaged in Pro j- Produc t i v i t y > Degree to genera te

revenue

Net Mu l t i p l i e r = Net Revenue / DSE

P3 = P3 / P1

FINANCIAL HEALTH:

O v e r h e a d E x p e n s e

T h e P r o fi t P l a n

- C o m p e n s a t e e m p l o y e e s- c a p i t a l- R e w a r d f o r t h e r i s k s

- B y p e r c e n t a g e- o r b y p r o fi t t a r g e t

I n d i v i d u a l P r o j e c t P l a n n i n g- R i g h t C l i e n t s & P r o j e c t s- A p p r o p r i a t e P r i c e- C o n t r a c t s- S t a ff w i t h Ta l e n t & E x p e r i e n c e- G o o d m a n a g e m e n t

FINANCIAL PLANNING:

Foster ing Creat iv i ty:

Accept New Ideas

Encourage Risk-tak ing & Fai lure

Al low indiv idual Efforts

MANAGING PEOPLE

Foster ing Creat iv i ty:

Provide Profess ional Growth

Reward Contr ibut ions

Communicate “Big Picture”

MANAGING PEOPLE

Determining the Need:

Adds to Fi rms’ capabi l i t ies & achieve pract ice

ADD, REPLACE, TRANSIT ION

Quest ions: NOW & FUTURE, Better & Br ighter , Most

Pos i t ive Impact

RECRUITING & HIRING

Determining the Need:

REVIEW- Bi l l ings, Work to be done, sk i l l s needed,

compensat ion, equipments

OPTIONS: Contractua l Serv ices, Loaned Employees

RECRUITING & HIRING

Rec ru i t i ng :

Emp loyee Re fe r ra l s f rom cu rren t S taff

Adve r t i s i ng

Un ive r s i t i e s

R E C R U I T I N G & H I R I N G

Rec ru i t i ng :

Search Fi rms & Ex te rna l Rec ru i te r s

Emp loyment Agenc ies

Ongo ing Rec ru i t i ng


Screen ing & In te rv iew ing :

Rev iew Resumes -S tandard o r open s ty le

S teps : App l i ca t ion Le t te r , Phone Ca l l , I n te rv iew



App l i ca t i on Le t te r :

1 . Comp le te & On -Time2 . Cove r Le t te r , Resume <Accura te3 . Expe r ience fi ts4 . Emp loyment H i s to ry Prog ress ion5 . Expec ta t ions match the Needs6 . Work Samp le Matches?7 . Compensa t ion Matches



Phone Ca l l - Ve r ifica t i on in De ta i l s

In te rv iew- Job - re la ted C r i te r i a

Fo l l ow -up Phone ca l l , Le t te r o r e -ma i l

( I f re jec ted ) B r ie f & Fac tua l


Se lec t i on :

Wr i t ten , o r ve rba l then wr i t ten

Le t te r- J ob Catego ry , wo rk scheud le , pay ra te , o the r benefits

B ig Fi rms - Handbook


Or ien ta t i on :

In i t i a l Days - de te rm ines l ong - te rm emp loyee < ca re fu l l y p l anned &

execu ted

In fo rm eve ryone fo r the newcomer

In fo rm M iss ion , Cu l tu re & Va lues


Or ien ta t i on :

In fo rm Marke ts & Pro jec ts

In fo rm In te rna l Resource & suppor t Se rv i ces


I n i t i a l Pe r iod :

3 -6 Months

Frequen t Feedback

Appra i sa l


Emp loyee < Impt . Resource < Re ten t ion i s mos t impt .

Sens i t i v i t y to Needs & Asp i ra t i ons

S T A F F D E V E L O P M E N T

Key fac to r s :

Recogn i t i on

Open Commun ica t ion

Job S tab i l i t y

H igh wages


Superv i s ing :

He lp ind i v idua l t o succeed

Cha l l enge & Recogn i t i on

Cha l l enge - i nvo lve in “B ig P i c tu re”


Superv i s ing :

Recogn i t i on< Pos i t i ve Feedback vs Nega C r i t i c i sms

Spec ific p ra i se


Superv i s ing :

Commun ica t ion :

- I n fo rma l Eve ryday con tac t- Fo rma l Regu la r Mtgs

- Off-s i te re t rea ts-Soc ia l Even ts


Per fo rmance Appra i sa l s : & Pro fess iona l Dev t

Appra i sa l - Looks Backwards-Pe r fo rmance vs J ob desc r ip t i ons

- Improves pe r fo rmance

Profl Dev t - l ooks a t Fu tu re- Growth

Tim ing - Regu la r- Once a /y r

- o r team rev iew


Tra in ing , Learn ing & Pro fess iona l Deve lopment :

Re ten t ion advantage

Forms :Con fe rence Fees

Tu i t i on FeePro fess i ona l assoc . T ime


Tr a i n i n g , L e a r n i n g & P ro f e s s i o n a l D e v e l o p m e n t :

P ro g r a m s :

M e n t o r i n g

I n - h o u s e P r o g r a m s - c o n t i n u i n g

o u t s i d e S e m i n a r s - b u d g e t / y r & r e p o r t b a c k

Tu i t i o n r e i m b u r s e m e n t - s e t b u d g e t & C r i t e r i a

I n t e r n D e v t P r o g r a m

C i v i c Pa r t i c i p a t i o n


Tr a i n i n g , L e a r n i n g & P ro f e s s i o n a l D e v e l o p m e n t :

P ro g r a m s :

M e n t o r i n g

I n - h o u s e P r o g r a m s - c o n t i n u i n g

o u t s i d e S e m i n a r s - b u d g e t / y r & r e p o r t b a c k

Tu i t i o n r e i m b u r s e m e n t - s e t b u d g e t & C r i t e r i a

I n t e r n D e v t P r o g r a m

C i v i c Pa r t i c i p a t i o n


Doesn ’ t C l i c k

Per sona l Reasons

For Othe rs

B IG IMPACT

T E R M I N A T I O N , L A Y O F F , A N D P E R F O R M A N C E I S S U E S

Vo lun ta ry Res ignat i on :

Par t i n Good te rms

2 weeks no t i ce

no t d i s suade i f someone i s dec ided

poss ib le ea r l i e r

Ex i t I n te rv iew


Te rm ina t ion :

Not su rp r i se , i n fo rmed o f improv ing pe r fo rmance

P lanned meet ing

Ob jec t i ve reasons

f rom de fens iveness to Tea r s

Procedu res be fo re l eav ing


Layoffs :

C runchTime

Cos t - cu t t ing -Be Hones t

Severance pay


Per fo rmance Prob lems :

in fo rm> verba l o r Memo

1.S ta te I s sue2 .Emp loyee ’ s p t o f v iew

3 .Ask so lu t i on4 . Ag ree on Ac t i on P l an

5 . Se t T ime to rev iew


Per fo rmance Prob lems :

Coach ing t ips :

Cour teous & Respec t fu lAc t i ve l i s ten ing

At tend to non -ve rba l cuesAvo id jump ing to conc lus i ons

Reach a Concensus


Art & Photos

Pp3 financial ops