Financial Management for the Professional Engineer

Instructor

David Wahby
Mr. Wahby is president of Wahby & Associates, a practice management consulting firm formed in 1990, working exclusively with engineering and architectural firms nationwide. Prior to beginning his consulting practice, Wahby served for 10 years as a principal level financial and administrative manager of a large, multioffice A/E firm. Over the past fifteen years,Wahby has presented scores of critically acclaimed programs for various national and state chapters of professional organizations including ASEC, AIA, ACEC, SDA and many others. Wahby serves on the faculty of the Georgia Tech School of Architecture Graduate Education Program Series. In addition to client consulting and speaking, Wahby writes a popular bi-monthly management column for a leading engineering professional journal. As a consultant, Wahby works directly with firms providing organizational, financial, marketing and human relations support and guidance. Please visit www.wahby.com for complete details.

Course Description

This training course teaches the design professional how to read and interpret the income statement, including such components as gross revenue, net revenue, direct, and reimbursable expenses, indirect expenses, net profit before taxes, depreciation, gross profit, and net profit after taxes. It examines the primary benchmarks of performance such as multipliers, utilization rate, direct personal expense ratio, and overhead.

In addition, this training course also examines the balance sheet components of assets (i.e., current, fixed, and others), liabilities (i.e., current and long-term loans), and stakeholder equity. Important benchmarks such as current ratio, quick ratio, receivable turn, aging receivables, and debt to equity ratio are also explored.

Cash flow drives the overall success and continuity of business. Consulting professionals need to understand the relationship between contracts, change orders, payment terms, and their organization's cash flow demands. This training course will provide you with the skills and methods to improve accounts receivable collections and maximize cash flow. This training course will explore project budgeting, progress monitoring, and methods to improve project bottom line results through more effective financial management.

Topics Covered

• Reading and Interpreting the Income Statement and Balance Sheet
• Industry Specific Accounting and Job Costing Packages
• Accrual and Cash Basis Accounting Methods
• Key Performance Measurements
• Creating Budgets, Plans and Establishing Targets
• Utilization Rate, Overhead, Direct Labor, Effective Multiplier
• Current Ratio, Working Capital, Liquidity, Debt To Worth
• Alternative to Profit Centers
• Firm Valuation Methods
• Ownership Transition Basics
• Creating a Financial Dashboard at Your Firm
• Project Management Financial Reporting and Monitoring
• Tangible Value and Goodwill
• Cash Flow – Invoicing and Collections

Who Should Attend

The material presented has primary application for new or entry level engineering supervisors, project managers, and new executives. Those in senior management positions (new or unfamiliar with financial issues) will gain insight into the financial performance of their organizations.

Seminar Benefits

• Our highly interactive program format includes several practice exercises as we work through the material to give you an on the spot chance to test your new understanding.
• Gain increased confidence and understanding of the financial operations of your company or, for that matter, any professional service firm
• Improve overall financial results through the timely and effective monitoring of those performance indicators that deserve the most attention
• Learn invoicing and collection strategies and techniques to increase your firm’s cash flow
• Become comfortably conversant in common engineering firm financial terms and measurements and in identifying and understanding your strengths and weaknesses as a business
• See how to relate and compare your firm’s performance to that of your competitors
• Increase the financial effectiveness of your project management system
• Understand the key opportunities and limitations associated with ownership transition and firm valuation
• Enhance your ability to make better personal investment decisions in general by better understanding how to read and what to look for in any financial statement

Summary Outline

• How To Understand Financial Statements
  • Income Statement    
  • Balance Sheet   
  • Forms of Business Organization
  • Accrual vs. Cash
• Key Performance Measures    
  • Utilization and Chargeability   
  • Overhead Rate   
  • Effective Multiplier    
  • Current Ratio – Debt to Worth – Working Capital
• Company Budgeting
  • Labor Budget
  • General and Administrative Budget
  • Revenue Budget and Forecasting
  • Capital Budgeting
• Project Management
  • The Project Manager’s Job
  • Budgeting and Tracking
  • Finding Problems Before Its Too Late
  • Skills Sets for Effective Project Managers
• Finding Your Firm’s Value
  • Book Value Vs Fair Market Value
  • Revenue Based Approaches
  • Profit and EBITDA Measures
  • Goodwill Determinates
  • Contrast Between Inside and Outside Buyers
• Cash Flow – Your Firms Lifeblood
  • Invoicing and Collections
  • Accounts Receivable and Work in Process
  • Retainers and Service Charges
  • When to Pull the Plug
  • Selecting the Right Contract Format