Project Financial Management

Fee: Euro 1500

Also available in Dutch

Project finance for better decisions

Project finance must show what resources a project will require and what they will cost—and whether the project is a worthwhile use of organizational resources.

This professional course develops the knowledge and judgement needed to estimate costs, establish budgets and prices, anticipate cash requirements, control financial performance and evaluate projects from project, organizational and customer or funder perspectives.

Connect project control with organizational decisions

Project managers are frequently held responsible for financial performance without receiving comprehensive training in project finance. They may prepare estimates, monitor budgets or receive accounting reports, but still lack a connected view of how project activities become costs, commitments, invoices, cash flows and organizational investment decisions.

Every project uses organizational resources. Employees contribute working time, materials are consumed, equipment and facilities are occupied, suppliers must be paid and shared services support the work. Yet project budgets do not always reflect the full cost of these resources. Accounting information may also arrive too late—or in a form that does not directly support project decisions.

Project financial management connects these different views. It translates project activities into credible estimates, budgets, prices, funding requirements and forecasts. It also provides the information required to decide what to charge a customer, whether a project should be approved and whether it should later be continued, changed, renegotiated or stopped.

Three connected perspectives

The course approaches project finance from three perspectives that must be understood together.

The project perspective

What resources will the project require? What will they cost? Are expenditure, commitments and physical progress developing as planned, and what is the likely cost at completion?

The organizational perspective

Does the financial plan reflect the organization’s real costs, available capacity and cash constraints? Does the project justify the resources committed to it when compared with alternative investments?

The customer or funder perspective

What is the customer or funder paying for? Which costs can be charged or recovered? When can invoices or funding claims be submitted, and will the agreed price or funding cover the costs and risks carried by the organization?

These perspectives are connected, but they are not identical. A project may remain within its internal budget while producing an unacceptable margin because not all costs can be recovered. A profitable project may still create cash-flow problems when expenditure occurs long before invoices are paid. A strategically important or grant-funded project may be worthwhile without generating a commercial profit, provided that the organization understands and accepts its contribution.

What you will learn

After completing the course, participants will be better able to:

• determine the real cost of project resources, including labour, materials, equipment, indirect costs and organizational overheads;
• develop and challenge project cost estimates without creating false precision;
• distinguish clearly between estimated cost, authorized budget, available funding and customer price;
• determine whether a customer or funder is paying for effort, deliverables or results;
• prepare project budgets, prices and time-based cash-flow forecasts;
• connect project administration with the organization’s accounting system;
• interpret expenditure in relation to physical progress;
• use earned value management indicators as signals for investigation rather than automatic judgements;
• forecast the likely financial outcome of a project;
• develop an investment case that includes financial and relevant non-financial benefits; and
• support decisions to approve, continue, change, postpone, renegotiate or terminate a project.

Calculations and software support this work, but they do not make the decision. Throughout the course, emphasis is placed on assumptions, uncertainty, interpretation and the ability to explain and defend a financial recommendation.

Course content

1. The financial life of a project

Understand how project work creates resource use, commitments, costs, payments, revenue and cash flows—and why physical progress and financial expenditure must both be recorded.

2. The real cost of project resources

Determine what labour, materials, equipment and facilities really cost the organization. Distinguish salary, direct cost, fully loaded cost and customer billing rate.

3. Shared costs and overheads

Distinguish direct project costs, project-related indirect costs and organizational overheads. Assess how shared costs should be allocated without distorting project comparisons or pricing decisions.

4. Project cost estimating

Build estimates from scope, activities, quantities, rates, timing and explicit assumptions. Make uncertainty visible and distinguish expected cost from contingency, budget and price.

5. Budgeting and pricing

Turn an estimate into an authorized budget and determine what should be charged to a customer or claimed from a funder. Examine whether payment is based on resources used, deliverables completed or results achieved—and who consequently carries the financial risk.

6. Cash flow and project funding

Translate the budget into a time-based cash-flow forecast. Identify when payments and receipts will occur, calculate the project’s peak funding requirement and assess whether the organization can finance the difference.

7. Project control and accounting

Align project activities and work packages with cost centres, accounts and reporting periods. Establish a two-way flow of timely information between project administration and company accounting.

8. Financial performance and forecasting

Look beyond whether the project is simply “on budget.” Relate expenditure to completed work, interpret earned value management indicators carefully and forecast the likely cost at completion before deciding whether corrective action is required.

9. The project investment case

Assess whether a project’s expected revenues, savings, avoided losses, strategic improvements or social benefits justify its costs, risks and use of organizational resources. Apply payback, return on investment and net present value without overstating uncertain benefits.

10. Project financial decisions

Bring the financial information together in a reasoned management recommendation. Decide whether the project should be approved, continued, modified, postponed, renegotiated or terminated based on its expected future consequences rather than money already spent.

Who should attend?

This course is designed for:

• project managers, coordinators, controllers and team leaders responsible for estimating, pricing, budgeting or controlling projects;
• programme and portfolio managers overseeing several projects;
• project sponsors and department heads who approve projects or allocate organizational resources;
• finance managers and accountants who support project-based work;
• managers responsible for customer contracts, grant-funded projects or investment decisions; and
• experienced project managers, including holders of PMP® or PRINCE2® certifications, who want to deepen the financial-management dimension of their professional practice.

The course can support progression from managing an individual project towards responsibilities involving programme or portfolio oversight, departmental resource allocation and advice to senior management on project investments.

No accounting qualification or project-management certification is required. Some experience of project work or responsibility for project-related decisions is recommended.

Teaching approach

The course combines concise conceptual teaching with practical calculations, cases, discussion and decision exercises. Participants examine projects from the perspectives of the project manager, the organization and the customer or funder.

The emphasis is not on memorizing financial formulas. Participants learn to investigate where figures come from, identify the assumptions behind them, recognize incomplete information and explain what the financial evidence means for management.

Practical information

Duration: Two weeks—ten working days
Daily contact time: Three instructor-led hours
Additional study: Assignments and group activities
Course fee: €1,500 plus a €100 non-refundable registration fee, excluding VAT
Total fee: €1,936 including VAT
Award: Certificate of participation
Availability: Offered several times per year

Certificate of participation

Participants who complete the course receive a certificate of participation from International Business School The Hague.

The certificate confirms participation in a professional course. It is not an accredited academic degree, professional licence or external certification. This is an independent professional-development course. It is not a PMP® or PRINCE2® examination-preparation course and is not affiliated with or endorsed by PMI or PeopleCert.

Make project finance support better decisions

Project financial management should do more than report how much has been spent. It should help managers understand what a project will require, what can be recovered, what financial outcome can reasonably be expected and whether the project remains a defensible use of organizational resources.