CIMA E1 Syllabus D. Shape And Structure Of The Finance Function - Level 3 - Digital Centres Of Excellence - Notes ^{3 / 6}

Digital Centres of Excellence

At this level, experts provide insight derived from the information that has been handed over to
them from level 4.

The four components at this level are:

1. Financial planning and analysis

2. Taxation

3. Project management

4. Project appraisal

Financial planning and analysis

This team helps the organisation to set, monitor and evaluate progress towards achieving organisational goals and objectives.

The specialists utilise both quantitative and qualitative analysis of all the operational aspects of the organisation in order to do so.

Some Insights to decision makers provided by Financial Planning & Analysis teams include the following:

1. Suggestions on how best to use surplus assets

2. Assessment of the overall financial health of the organisation

3. Analysis of products and product lines to determine which generate the largest portion of net profit

Taxation

The tax specialists focus on:

1. Tax compliance - following the rules and regulations

2. Tax planning - reduce the total tax paid

Insights to decision makers provided by taxation teams include:

1. Identification of tax loopholes and legal opportunities to reduce tax liabilities

2. Projections of potential future changes to tax rates by the government and effect of the organisation

3. Predictions of future tax liabilities due to changes in tax regulations and laws

4. Monitoring of financial systems to ensure the correct tax treatment of transactions

5. Impact of projects and forecasted future performance on tax liabilities

Project Management

These teams work to deliver projects within a timeframe, of the correct quality and within budget.

There are five stages to the project management process:

1. Initiation

2. Planning

3. Executing

4. Controlling

5. Review and close

Some insights to decision makers provided by project management teams include:

1. Project plans that include the project’s scope and required resources

2. Communication of project progress and predicted completion dates that can feed into areas of the business that are impacted by the project

3. Suggested sequencing of project activities and their impact on business areas

Project Appraisal

These teams provide costs and benefits of a new project.

It takes place as part of the first stage (initiation) of the project management process.

Projects can be appraised using a number of different techniques

1. Payback

2. Net Present Value(NPV)

3. Internal rate of return(IRR)

Some insights to decision makers provided by project appraisal teams include:

1. Advice on whether projects will add value to the organisation

2. Predictions of the value of projects given different costs of capital (interest rates)

3. Professional opinion on the value to the business of non-financial costs and benefits of projects