Financial Accounting for Lenders Online

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Business Issue - Understanding how cash flows through a business is fundamental to sound commercial lending—lenders need to understand how financial accounting issues and practices affect the financial statements being analyzed. Since most financial accounting courses take the point-of-view of the accountant, many lenders have trouble understanding cash flow cycles and evaluating financial risk in a business.

Omega Performance’s Solution - Financial Accounting for Lenders (FAL) Online is Omega Performance’s system for teaching accounting and cash flow analysis as they relate to commercial credit decisions. Its hands-on, bank-specific approach shows lenders how to identify asset conversion cycles, which explain the underlying reasons businesses borrow, and provide the key for accurately judging whether a borrower will be able to repay the loan. Lenders learn to assess accounting risk inherent in business financial statements.

FAL Online is an ideal prerequisite to our Commercial Loans to Business or Commercial Loans to Small Business training programs. With FAL Online, you can train one lender at a time or the entire organization. Learning time is reduced through a task-focused presentation of materials. Travel costs are eliminated. Assessments can be delivered to remote sites easily. An online mentor is available to assist participants with any questions. FAL Online also gives lenders greater flexibility when it comes to training time as the solution is accessible 24 hours a day, seven days a week.

What Is Included

The five modules of FAL Online teach participants to understand accounting and cash flow analysis from the lender’s perspective:

Financial Reporting introduces the primary financial statements (balance sheet, income statement, owner’s equity and cash flow) and the notes and identifies the connections among these. A key focus is on issues concerning the financial reporting environment, including guidance and the roles of organizations that influence GAAP, the role of management and the role of the CPA in audit and attest services and in review services. The various levels of assurance to a lender from independent accountant opinions are described.

Introduction to Accrual Accounting concentrates on the fundamentals of accounting for business activities over time. Timing differences between actual cash flow and recognition are described and illustrated through the use of balance sheet and income statements. This module introduces the principles of sources and uses of cash and provides simple techniques to trace cash through common business activities.

Accounting for the Operating Cycle illustrates the operating cycle as a model for getting behind the numbers to understand business activities and risks. The focus is on evaluating revenue and expense recognition practices and understanding the cash flow implications on accounts receivable, inventory and cost of goods sold. This module also covers reporting requirements for other comprehensive income and reporting requirements for public companies.

Accounting for the Capital Investment Cycle and Other Assets introduces the capital investment cycle as a model and the impact of the capital investment cycle on cash flows related to fixed assets, other long-term assets including goodwill and other intangibles, and depreciation and amortization. This module introduces calculations to determine the cash effect of sale of fixed assets with an emphasis on valuation and impairment of fixed assets and goodwill assets.

Accounting for Liabilities and Equity examines various types of long- and short-term liabilities including information and disclosure of commitments and contingencies and other potential obligations. Participants examine the cash flow implications of various stock transactions and how different tax treatments affect a company’s revenue, expenses and profitability.

Delivery Options

FAL Online includes interactive modules with practice exercises, case-based progress checks with feedback and remediation links to relevant content, printable job aids and an online glossary. Additionally, access to an online mentor ensures attainment of learning objectives.

Results You Can Expect

FAL Online helps you and your lenders:

Build a strong foundation for training in commercial lending
Improve loan quality through a better understanding of financial risks
Reduce risk by promoting cash-based financial analysis
Improve productivity by promoting more efficient credit analysis
Build strong relationships by improving the ability to consult with customers
Reduce training time
Eliminate travel costs
Have more flexibility in delivering high-quality training

Who Should Be Trained

Entry-level commercial lenders and credit analysts
Mid-career commercial lenders and credit analysts who need a refresher program
Credit administration staff
Loan review staff
Private client and small business relationship managers and analysts who need to understand the business activities of their clients
Operations personnel with financial analysis responsibilities

Prerequisites

None. Participants who have taken accounting courses may skip or skim several units of the first module.