To be successful as a financial management engineer, one must “engage with their business partners through a shared understanding-and language-of an organization’s financial goals and requirements. Honing that understanding by learning the financial terms and concepts involved increases cooperation and provides more opportunity for achieving success,” so claimed HDI magazine.
For the most part, the consulting engineer will observe the following when it comes to financial management in engineering:
Forecasting, planning, programming and budgeting
Managing financial assets and liabilities
Funds allocation, collection, disbursement and control
Acquisition and project management
Business Process Reengineering
Let’s take a close look at each of the afore-mentioned points. In a large organization, someone is designated to handle all aspects forecasting, planning, programming and budgeting. But for the one-man engineer who employs only a few hands, the consulting engineer must link operational requirements with financial obligations.
This is where costing, planning,programming and budgeting comes in. If there is an error in the forecasting method used,definitely the budget will suffer. The consulting engineer must be able to look with foresight into execution of projects.
He does so like a farmer plans to sow and to reap. The downside to it is that he appears to have more steps to take than the farmer has. It is easy for financial managers to focus on assets rather than on liabilities. Wealth can be deceitful and any consulting engineer who also is in a position to manage his or her company’s resources will watch the balance sheet of his company like a hawk.The second on the list is the management of financial assets and liabilities.
The consulting engineer must keep his eyes on liabilities first, then assets. Liabilities are “A company’s legal debts or obligations that arise during the course of business operations. Liabilities are settled over time through the transfer of economic benefits including money,goods or services.”
Of course, there are various forms of liability definitions. The stated here is from Investopedia, an online library for corporate bodies. The same source gives the definition of asset as a “piece of property or equipment purchased exclusively or primarily for business use.
Business assets span many categories, such as vehicles, real estate, computers, office furniture and other fixtures. Much of the start-up capital for many businesses goes toward the purchase of this type of asset. Business Assets are listed on the firm’s balance sheet as items of ownership.”
There are fixed assets and there are other assets which change in values.Oftentimes, it is easy for financial managers to focus on assets rather than on liabilities. Wealth can be deceitful and any consulting engineer who also is in a position to manage his or her company’s resources will watch the balance sheet of his company like a hawk. As regards funds allocation, collection, disbursement and control the consulting engineer needs to track and control project funds and deliver these directly to those properly performing project work.
He makes sure each project receives its own separate, non-interest bearing account-project funds are never co-mingled. He makes sure that those involved in projects are paid on time.Business process re-engineering takes into account a procedure and set of logically related tasks performed to achieve a defined business outcome. Re-engineering is the basis for many recent developments in management.
It is also known as business process redesign, business transformation, or business process change management.Online Wikipedia affirms that business process re-engineering is a technique applied to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors.
A key stimulus for re-engineering has been the continuing development and deployment of sophisticated information systems and networks. Leading organizations are becoming bolder in using this technology to support innovative business processes, rather than refining current ways of doing work.