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Finance and Accounting

Finance and Accounting

Note: see below the Finance and Accounting sub-categories.

Major business practices are renowned for encountering difficulties. Even they that are not the first of their type can encounter massive problems, no matter how good the initial planning.

Finance and accounting are areas when some practices in an organization comes into conflict with its business-as-usual parent. Understanding and applying sensible finance controls and metrics, so that these are in tune with the lifecycle of the business practices can be challenging, not least because the parent organization will be required to report its performance in the standard annual accounting cycle.

Experts advise not making your financial models so complicated that only your financial analyst can understand them. And they also advise don’t make your accounting systems so complicated only your accountant can understand them. You should not need a PhD in econometrics to understand your project’s finances. Make your professionals boil down the numbers into a report you are sure you understand. Finally, experts advise don’t rely on your experts to spot trends. They can sometimes be too involved in keeping the ship’s engines running to notice that the ship is listing.

Experts are there to explain to you what is happening, not what they are doing. The process of how the ship runs is not your concern; the course the ship is on is your concern. Remember, the people who run the engines are not up on the captain’s deck looking out for bad weather or other ships on a crash course.

Navigate this section to learn more about legal and business-related finance and accounting.

Contracts

You never know if a contractor will make good on its warranties. Holding back some of the contract price until the end of the warranty period is obviously a good way to go but isn’t always commercially acceptable to reputable contractors. Always focus on the duration of coverage and make sure it is not shorter than any period that may be imposed by law. You don’t want to shorten the warranty period by mistake.

If the contractor submits to court without a jury trial in a jurisdiction with a developed body of construction law – a court outcome can be much more predictable based on statutory and case law guidance if applicable in the jurisdiction. If circumstances do not make a court proceeding possible, an international arbitration has the benefit of flexibility of the parties to set the ground rules and the confidentiality of the arbitral decision. Documents are never filed for possible review by the public. Just make sure your counterpart has a significant presence in a jurisdiction that has treaty protection in the involved countries because you don’t want to go through arbitration only to learn the judgment won’t be respected or is problematic to enforce in the county where the counter party’s assets are located.

Contracts are how organizations formally engage with each other on a project. The contract should establish what will happen and what the contracting parties will do, in the event that particular risks in the project become live issues. Navigate this section to learn more about contracts: how to design, negotiate and then manage them during the course of your project.

Bidding and tendering

Time and valuable resources wasted on failed bid preparation or successful bids you wished you’d never won.

The ultimate sucess of many business and legal practices is often decided in the bidding and tendering process. It is important for both client and contractor organizations to understand the process in the context of the whole project to ensure a stable footing for the project, once the implementation starts. Navigate this section to learn more about bidding and tendering from the perspective of both clients and contractors.

Budgeting

Budgeting involves matching the likely resources of the organization, including cash, to the requirements of a business practice or project. Budgets are forecasts and are subject to change. They should include options and contingencies for the associated opportunities and risks. Navigate this section to explore alternative techniques for establishing and managing business and legal budgets.

Procurement

Note: see below the procurement sub-categories .

Many business and legal practices are essentially exercises in procurement since the majority of the raw resources required, including labour, may be bought in. The process and effectiveness of procurement significantly influences the speed, agility and cost of works and projects. Navigate this section to explore the world of procurement.

Purchasing