Management of projects for improvement and development of the enterprise. Project finance management

When you have determined the resources needed for the project, the price and the required amount of each of them, you have a need for money.

Let's leave deep calculations to financiers. You and I need to be able to set them a task and understand the results of calculations. Here main questions, that interest the manager.

How much money do we need and when?

Can we afford it?

Where to get the missing funds: the parent company, other projects, attraction of external investors, loans?

When will we return the funds invested in the project?

When will we reach the planned profit volume?

Naturally, a project is always a risky event to some extent. Therefore, from a financial point of view, it only makes sense if its return exceeds that which we can get by investing in relatively risk-free instruments, such as deposits in large state-owned banks.

The two basic documents in project finance management are the estimate and the budget.

Project estimate- a list of project costs broken down by item.

Example. Estimate for the repair of a two-room apartment in the house of the P-44T series of the "Premium class" category (excluding the cost of materials) in c.u.

Budget- a document representing a schedule of planned expenses and incomes, distributed by items within the framework of the project. The main difference between the budget and the estimate is the presence of not only the expenditure, but also the revenue part, as well as a breakdown by periods.

Budget example:

Conference budget

Director General of MegaCon LLC Andreev A.N.

Chief Accountant 000 MegaCon Karaseva B.C.

We are also interested cash flow schedule (DDS, net cash flow, net cash flow, cash flow) 1 by project.

1 The example is taken from www.profitd.ru.

1 See Section 4.1.2 Project Life Cycle.

How is it formed?

Before we find out, we need one term,

Net Present Value- NPV)- the amount of discounted revenues minus discounted costs received in each year during the life of the project.

EXAMPLE 60. Sergey Baguzin, Deputy Director for Development of a large IT company:“Business has many dimensions. The owner, as a rule, begins with the merchant. By analogy with mechanics (a branch of physics), we can say that profit management is the first dimension of business (one-dimensional space). Further, as the business develops, the owner (manager) comes to understand the importance of managing finances, personnel, operations, quality... A multidimensional space arises. The more dimensions a manager can manage, the more competent he is.

What does "discounted" mean? The fact is that the value of money changes over time: as a rule, it decreases. The dollar today and the dollar 10 years ago (not to mention the beginning of the 20th century) have completely different weights. Discounted - means "taking into account the change in the value of money over time."

In short projects (usually up to 3 years), the change in the value of money can be neglected 1 . In the rest, we must take it into account. First you need to define discount rate. It is set by the financiers of the company. If you have a small company and you do all the calculations yourself, then you can focus on the rate at which you can actually place your funds, for example, in Sberbank.

Discounting the amount in 1000 c.u. at a rate of 10%:

In the example below, it is assumed that the income and expenditure figures have already been taken into account, taking into account discounting (Fig. 40). NPV Calculation Example

It is NPV with a cumulative total that is plotted vertically on the DDS chart. The investor is interested in the following main project settings 1 .

NPV, which shows us how much money we will earn on the project.

PI (profitability index, profitability index)- the amount of income from the project, divided by the amount of costs for the project.

РВР (payback period, payback period), those. the period after which we will return our money invested in the project. Usually it is calculated taking into account discounting.

IRR (internal rate of return, internal rate of return)- discount rate
at which NPV is equal to zero 2 .

If you compare IRR with any norm, for example, with market rates for attracting loans or with the rate of return of projects adopted in the company, then the IRR value allows you to determine whether the analyzed project gives an acceptable efficiency in the use of financial resources.

That is, the value of 1000 USD received or spent in the seventh year of the project implementation is equal to the value of 51 - 3.16 USD in the base (initial) period.

Discount coefficients for various rates and periods can be either calculated independently or determined from special tables that are given in financial reference books.

Thus, before taking into account in the calculations a certain amount in the future period, we need to multiply it by the coefficient for this period. This allows you to more realistically assess the payback period and profit of the project.

1 Although some companies consider discounting even within one year: a matter of required accuracy and labor costs.

EXAMPLE 61. Sergey Baguzin, Deputy Director for Development of a large IT company:“We are a distributor and use IRR (in Excel, this is a function of IRR - internal rate of return) as the main indicator of the effectiveness of product business management. Fantastically capacious indicator! It is sensitive to almost any managerial impact aimed at increasing the efficiency of distribution: an increase in the deferral of loans, a reduction in receivables, a decrease in inventory balances, an increase in sales margins ... "

1 I deliberately give simplified definitions. For an in-depth study of the topic, refer to the special
literature.

2 I understand that the definition is not entirely clear. However, his explanation is beyond the scope of the book. Search in friend
stokers.

Figure 40. Calculation of NPV: by years and by years with cumulative total

Of course, the indicators described above depend on the numbers that are the basis of the calculations: fixed and variable costs of the project, estimated sales volume, etc.

If you are an investor in any project, the one who approaches you for money must provide you not only with the above indicators, but also with the progress of their calculation, as well as the figures underlying them. And you and your team will have to check them. Here you will need not only a financier, but also a marketer, and possibly other specialists, for example, in economic security.

PRACTICE 54

Develop an enlarged budget for your project (by the most significant items). Build a cash flow chart.

How does it suit you?

Enterprise Finance

Topic: Financial management of an enterprise on the example of Sfera LLC

Introduction

Chapter 1. Finances and Financial Mechanism

1.1 Functions and concept of finance

1.2 Financial mechanism of enterprise management

1.3 Principles and sources of finance formation

Chapter 2

2.1 Enterprise financial management system

2.2 Methods for improving the financial management system of Sfera LLC

Conclusion

Bibliography

Introduction

The market economy, with all the variety of its models known to world practice, is characterized by the fact that it is a socially oriented economy, supplemented by state regulation. Finances play a huge role both in the very structure of market relations and in the mechanism of their regulation by the state. They are an integral part of market relations and at the same time an important tool for implementing state policy. Therefore, the relevance of the topic: The organization of financial management of a company in the field of small business is more important than ever. it is necessary to know the nature of finance well, to deeply understand the conditions of their functioning, to see ways to use them to the fullest in the interests of the effective development of production. In the structure of the financial interrelations of the national economy, the finances of enterprises occupy the initial, determining position, since they serve the main link in social production, where material and intangible benefits are created and the predominant mass of the country's financial resources is formed.

The market economy involves the formation and development of enterprises of various organizational and legal forms based on different types of private property, the emergence of new owners - both individual citizens and labor collectives of enterprises. The main type of economic activity is entrepreneurship - this is economic activity, i.e. activities related to the production and sale of products, the performance of work, the provision of services or the sale of goods needed by the consumer. It has a regular character and is distinguished, firstly, by freedom in choosing directions and methods of activity, independence in decision-making (of course, within the framework of laws and moral standards), and secondly, by responsibility for the decisions made and their consequences. Thirdly, this type of activity does not exclude risk, losses and bankruptcies. Finally, entrepreneurship is clearly focused on making a profit, which, in the conditions of developed competition, is also the satisfaction of social needs. This is the most important prerequisite and reason for interest in the results of financial and economic activity. The implementation of this principle in practice depends not only on the independence granted to enterprises and the need to finance their expenses without state support, but also on the share of profits that remains at the disposal of the enterprise after paying taxes. In addition, it is necessary to create an economic environment in which it is profitable to produce goods, make a profit, and reduce costs. Under the financing of the enterprise is understood the attraction of the capital necessary for the acquisition of fixed and working capital of the enterprise, in other words, covering the need for capital. The purpose of the course work is to analyze the efficiency of the enterprise on the example of LLC "Sphere", to see how economically competently manage its activities. The objectives of the course work are to identify existing potential problems, production and financial risks, to determine the impact of decisions on the final results of the enterprise.

Chapter 1. Finances and Financial Mechanism

Functions and concept of finance

The finances of an enterprise are a system of monetary relations arising as a result of its production and economic activities.

The finances of enterprises from a material point of view represent the monetary accumulations of enterprises or financial resources. Financial science does not study resources as such, but relationships arising from the formation and use of these resources.

The initial formation of financial resources occurs at the time of the establishment of the enterprise, when the statutory fund is formed. Its sources, depending on the organizational and legal forms of management, are: equity capital, shares of members of cooperatives, sectoral financial resources (while maintaining sectoral structures), long-term credit, and budgetary funds. The value of the authorized capital shows the amount of those funds - fixed and circulating - that are invested in the production process.

The main source of financial resources at operating enterprises is the cost of products sold (services rendered), various parts of which, in the process of revenue distribution, take the form of cash income and savings. Financial resources are formed mainly from profit (from the main and other activities) and depreciation.

Spheres of manifestation of financial relations:

Relations between enterprises for the supply of raw materials, materials, components, sales of products and services.

Relationships between enterprises and banks that arise when obtaining and repaying a loan, when buying and selling foreign currency, and when paying for banking services.

Relations with insurance companies and property, commercial and financial risks insurance organizations.

Relations with commodity, commodity, stock exchanges on operations with production assets.

Relations with investment funds and companies for investment placement, privatization.

Relations with affiliates and subsidiaries.

Relations with staff on the payment of salaries, dividends, with shareholders, if they are not members of the labor collective.

Relations with the tax service when paying taxes, with audit firms, with extra-budgetary organizations.

The common element of the listed monetary relations is that they:

1. Expressed in monetary terms

2. Represent a set of payments and receipts

Finance Functions:

reproductive

Distribution

Control

The reproductive function consists in servicing the circulation of fixed and circulating capital with monetary resources in the course of the commercial activity of an enterprise on the basis of the formation and use of cash income and savings.

Distribution function - the essence of this function is to ensure the optimal proportions of the distribution of profits (income) between enterprises and the state, between various funds of enterprises.

The control function is financial control over the production and economic activities of an enterprise in terms of consumption and expenditure of production resources, as well as control over the relationship of an enterprise with banks, the state and other enterprises.

The enterprise acts as a legal entity, which is determined by a combination of features: the isolation of property, liability for obligations with this property, the presence of a bank account, and acting on its own behalf. The isolation of property is expressed by the presence of an independent balance sheet, which lists the property of the enterprise.

The financial relations of an enterprise arise when, on a monetary basis, the formation of the enterprise's own funds, its income, the attraction of borrowed sources of financing of economic activity, the distribution of income generated as a result of this activity, and their use for the development of the enterprise.

The organization of economic activity requires appropriate financial support, i.е. initial capital, which is formed from the contributions of the founders of the enterprise and takes the form of authorized capital. This is the most important source of formation of the property of any enterprise. Specific methods of formation of the authorized capital depend on the organizational - legal form of the enterprise.

When creating an enterprise, the authorized capital is directed to the acquisition of fixed assets and the formation of working capital in the amount necessary to conduct normal production and economic activities, it is invested in the acquisition of licenses, patents, know-how, the use of which is an important income-generating factor. Thus, the initial capital is invested in production, in the process of which value is created, expressed by the price of products sold. After the sale of products, it takes on a monetary form - the form of proceeds from the sale of manufactured goods, which is credited to the company's current account.

Revenue is not yet income, but a source of reimbursement for the funds spent on the production of products and the formation of cash funds and financial reserves of the enterprise. As a result of the use of proceeds, qualitatively different components of the created value are distinguished from it.

First of all, this is due to the formation of an amortization fund, which is formed in the form of depreciation deductions after the depreciation of fixed production assets and intangible assets takes the form of money. A prerequisite for the formation of an amortization fund is the sale of manufactured goods to the consumer and the receipt of proceeds.

Since the material basis of the created goods is made up of raw materials, materials, purchased components and semi-finished products, their cost, along with other material costs, depreciation of fixed production assets, wages of workers, is the costs of the enterprise for the production of products, which take the form of cost. Until the proceeds are received, these costs are financed from the working capital of the enterprise, which are not spent, but are advanced into production. After the receipt of proceeds from the sale of goods, working capital is restored, and the costs incurred by the enterprise for the production of products are reimbursed.

The separation of costs in the form of cost makes it possible to compare the proceeds received from the sale of products and the costs incurred. The meaning of investing in the production of products is to obtain net income, and if the proceeds exceed the cost, then the company receives it in the form of profit.

Profit and depreciation are the result of the circulation of funds invested in production, and relate to the company's own financial resources, which they manage independently. Optimal use of depreciation and profit for the intended purpose allows you to resume production on an expanded basis.

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30. Project Cost and Financing Management

Key Definition

Project Cost and Financing Management(Project Cost and Finance Management)- the project management section, which includes the processes necessary for the formation and control of the implementation of the approved project budget. Consists of resource planning, cost estimation, budgeting and cost control.

body of knowledge

The project cost and financing management process includes:

□ Development of the concept of managing the cost and financing of the project:

Development of a strategy for managing the cost and finances of the project (defining goals and
tasks, criteria for success and failure, limitations of 74 assumptions);

Conducting economic analysis and justification of the project (marketing,
assessment of cost and sources of financing, forecast of implementation);

General economic evaluation of the project;

Development of an enlarged financing schedule;

Determination of requirements for the cost and financing management system in
project;

Concept approval.

□ Cost and financing planning in the project:

Resource planning and determination of their quantity required for successful
project implementation;

Estimation of the project cost (based on the developed estimate documentation,
expert assessments, etc.);

Formation of the project budget,

Development of a financing plan, which should correspond to the formed
project budget:

Development of a cost and financing management plan for the project.

□ Organization and control of project implementation by cost:

Distribution of functional duties and responsibilities in accordance with
cost and financing management plan for the project;

Implementation of the cost and financing management system in the project;

Accounting for actual costs in the project;

Formation of reporting on the state of the cost and financing of the project.

□ Analysis of the state and regulation of the cost of creating a project:

Current audit of the state of the project in terms of cost and finance;

Determining the degree of project implementation by cost indicators
(carried out on the basis of an analysis of actual costs and estimated cost
executed works);

CHAPTER 1. KNOWLEDGE AND EXPERIENCE

Analysis of deviations in the cost of work performed from the estimate and budget:

Analysis of various factors influencing positive and negative deviations;

Preparation and analysis of corrective actions;

Forecasting the state of the project work in terms of cost;

Making decisions on regulatory impacts to bring the performance of work
project at a cost in line with the budget.

□ Completion of cost and finance project management:

Economic analysis and evaluation of results;

claims resolution and conflicts;

Preparation of the executive estimate and financial report;

Final settlements and closing of financing;

Formation of the archive.

Main literature

Voropaev V.I., Galperina Z.M., Razu M.L., Sekletova G.I., Yakutia Yu.V. et al. Program and project management / Edited by Razu M.L. Module 8. In the 17-module program for managers "Management of Organizational Development". - M.: Infra-M, 1999. - S.392.

Voropaev V.I. Project management in Russia. - M.: Alane, 1995. - S.225.

Mazur I.I., Shapiro V.D. et al. Project Management: A Handbook/ Edited by AI. Mazur and V.D. Shapiro. - M.: Higher school, 2001. - S.875.

Ilyin N.I., Lukmanova I.G. etc. Project management. - St. Petersburg: DvaTri, 1996. - P. 610.

Lobanova E.N., Limitovsky M.A. Financial management. Module 14. In the 17-module program for managers "Management of the development of the organization." -M.: Infra-M, 1999.

Guide to the world of project management / Per. from English. - Yekaterinburg: USTU, 1998. - S. 192.

Archibald R.D., Managing High-Technology Programs and Projects. 2nd ed. -New York, NY: John Wiley & Sons, 1992.

Cleland D.I., King W.R., Project Management Handbook. 2nd ed. - New York, NY: Van Nostrand Reinhold, 1988.

ICB - IPMA Competence Baseline. Version 2.0. IPMA Editorial Committee: Caupin G., Knopfel H., Morris P., Motzel E., Pannenbacker O.. - Bremen: Eigenverlag, 1999. - p.l 12.

Ireland L.R., Quality Management for Projects & Programs. - Drexel Hill, PA: PMI, 1991.

Kerzner H., Project Management: A Systems Approach to Planning, Scheduling, and Controlling. 6th ed. - New York, NY: John Wiley & Sons Inc., 1997.-p. 1200.

Project management - Fachmann. - Eschbom: GPM und RRW, 1991. - VI, V2, pp.1130.

Turner J.R., The Handbook of Project - Based Management: Improving the Processes for Achieving Strategic Objectives. - Maidehead: McGraw - Hill, 1993. - p.540.

Turner J.R., Grude K.V., Thurloway L.- The Project Manager as Change Agent. - Maidehead: Me Graw-Hill, 1996.

additional literature

Holt R.N. Fundamentals of financial management. - M.: Delo Ltd., 1995.

Holt RN, Barnes SB. Investment planning. - M.: Delo Ltd., 1994.

The chart of accounts of projects allows not only to formalize the cost accounting procedures for the project and harmonize them with the requirements of accounting and reporting, but also to determine the responsibility centers for specific types of costs within the project.
It is necessary to distinguish three stages of budget formation: The preliminary budget is formed at the pre-contract stage for holding a competition or tender to select a contractor. The framework budget is formed at the stage of concluding a contract and determines the entire amount of project financing. The annual budget is formed for each year of the project implementation and determines the amount of funding for the planned year within the framework contract.
The basis for the implementation of financial planning is the project plan and applications of contractors for financing work in the planned year.
The preliminary project budget is formed in accordance with the requirements of the World Bank or other investor and determines all the main components of the cost, broken down by type of activity (see Table 6.6).
The framework budget of the project is formed in the form of a cost estimate as an attachment to the price agreement protocol. The set of documents that define the structure of the project budget may be different depending on industry requirements. For example, in accordance with the requirements and methodological recommendations of the Ministry of Economic Development and Trade of Russia, it includes: price negotiation protocol; cost estimate (see Table 6.7); breakdown of costs under the item "Materials"; breakdown of expenses under the item "Special equipment"; breakdown of costs under the items “Basic salary”, “Additional salary”, “Deductions for social needs”; breakdown of costs under the item "Travel expenses"; a certificate of the amount of overhead costs to the price structure; breakdown of costs under the item "Other direct costs"; breakdown of costs under the item “Costs for work performed by third-party organizations and enterprises” (the structure is similar to the cost estimate) (see Table 6.7).

Table 6.6. Project budget structure

The annual budget of the project is formed in the form of a cost estimate, similar to the framework budget, with a breakdown of costs by quarters and months.
Financial analysis of the project
The purpose of the project financial analysis process is to control the implementation of the work plan and project financing in order to solve the following tasks: comparing costs with the provided budget and determining deviations from the budget; taking the necessary corrective measures in case of deviation from the budget.
Cost accounting is carried out on an ongoing basis both at the level of individual tasks and at higher project levels, including

Table 6.7. Costings

at the project level as a whole. It is necessary to take into account the following types of expenses: real direct costs (labor, materials, etc.) incurred in the current period; deferred expenses that are not yet reflected in the accounting documentation, but the need for which has already been identified; "late" expenses, which include the costs of previous periods, for one reason or another (administrative errors, late submission of invoices, etc.) that fell into the current calendar period.
For financial analysis, information about the planned and actual status of the project and the project budget is used.
The result of the financial analysis process is the Report on the financial analysis of the project, containing the following sections: the main financial indicators of the project (such indicators can be, for example, well-known indicators of earned value);
necessary corrective actions, the adoption of which is within the competence of the project manager; proposed changes in the budget that need to be submitted to higher authorities.
Financial audit of the project
The purpose of this process is to verify that the project complies with the procedures and rules for funding project contracts.
The main tasks of the process are: verification of financial statements and payment and settlement documentation related to the project; confirmation of the reliability of the data contained in the reports and other documents of the project, the identification of facts of violations of the accounting procedure; verification of compliance with the requirements of the law when performing financial and economic operations in the implementation of the project.
The financial audit of the project is carried out with the involvement of an audit company, selected in agreement with the representative of the investor.
During the financial audit of the project, the following are studied: documents related to the financing of project contracts; accounting documents.
The result of this process is an audit report on the project. The financial audit should be carried out annually, as well as at the end of the project.
Financial report for the Investor
The purpose of this process is to provide financial statements for the project to the Investor.
The report should reflect the costs of the project at the level of the project as a whole and at intermediate levels of the work structure (project stages) and the ratio of actual and budgeted costs.
The report should include the following information: information about the work performed and the projected scope of work;
actually spent funds and projected payments by types of costs; receipts and payments by sources of financial resources; comparison of planned and forecasted payments and receipts.
The report should also include forecasted expenses for future periods that have not yet been reflected in the accounting documentation.
The initial data for this process are indicators of primary financial documents and information about the labor costs associated with the implementation of project work. The result of this process is a quarterly (frequency may vary for different projects) report for the Investor.
An example of the structure of a financial report is shown in Table 6.8.
Table 6.8. Project financial report form

Literature Scott G. Result-based management and public/private partnership // Intern. Symposium “Project Management: Business. Ideas. Practice”, St. Petersburg, May 17-18, 2005 Ekluf J.A. Project Management in large socio ethical reform programs (with examples from swedish experience) // Intern. Symposium “Project Management: Business. Ideas. Practice”, St. Petersburg, May 17-18, 2005. Samoshchenkov S., Soshnin A., Tsipes G. Programs and projects in government bodies // Sat. Proceedings IV Vseros. practical conf. "Standards in the projects of modern information systems", Moscow, April 21-22, 2004. Moscow: FOSTAS, 2004. Performance-oriented budgeting: goals and principles. Eco-rice-NEI. 2002. 16 p. (www.nei.ru) Performance Based Budgeting: International Experience and Possibilities of Application in Russia. Center for Fiscal Policy, 2002. 59 p. (www.nei.ru) Poznyakov V. Project Management in International Organizations Working in Russia // Project Management. 2005. No. 3(3). Soshnin A. Application of project management methods in the preparation and implementation of federal targeted programs // Intern. Symposium “Project Management: Business. Ideas. Practice”, St.-Petersburg, May 17-18, 2005. Requirements and methodological recommendations for organizations - executors of state contracts within the framework of the FTP “Electronic Russia (2002-2010)”. Min. Development and Trade of the Russian Federation, May 31, 2004 Archibald R. Management of high-tech projects. M.: DMK Press, 2002. Tovb A., Tzipes G. Project management: standards, methods, experience. M.: CJSC "Olimp-Business", 2003.