Management

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Transcript of Management

Financial management

Control • Control and reporting

– Loose or tight

– Locus of control

• Development of “standards”

– Information sources

– Variability

• Monitoring of actual against standards

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.2

Control feedback

• Control and reporting– Loose or tight

– Locus of control

• Development of “standards”– Information sources

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd. 3

Cash flow

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd. 4

Cash flow predictions ¼ 1/3 model

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd. 5

Cash flow projectionsDHSS curve

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd. 6

Min and Max cash requirements

– Based on “gradient” of expediture.

– If all occur at same time can trigger bank action

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd. 7

Impact of management

• Control and reporting– Loose or tight

– Locus of control

• Development of “standards”– Information sources

– Variability

• Monitoring of actual against standards© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd. 8

Impact of management

• Control and reporting

– Loose or tight

– Locus of control

• Development of “standards”

– Information sources

– Variability

• Monitoring of actual against standards

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd . 9

Reality• Different approaches to resource payments– Labour- weekly–Materials- availability of credit– Subcontractor-dependent upon terms

• Generally a pragmatic approach– Cash cutoff date for all contracts determined– Payment “runs” to minimise need for cash

requirements– Accounting information systems

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd. 10

Graphically

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.

Data from site

• More accurate than models• Use of programme and documentation to develop schedule• Use of contract to anticipate monies in• Subcontract schedule to look at major payments out• Use of pro forma

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.

Aggregate positions

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd. 13

Aggregate cash budget

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd. 14