Introduction to Algorithms and Flow

Charts in Financial Services

WEEK 03
BY: MS.SARAH AHMED
EMAIL ID:ssarahahmedd@gmail.com
Outline
What is Algorithm?
Properties of algorithm
What is Flow Chart?
What is a Finance Flow Chart, or Workflow?
What Is Financial Reporting?
What Is Reconciliation?
What is Ledger?
What is Capital?
Flowchart Symbols
Outline
Steps to Draw Flow Chart.
Basic Flow chart
Process Flow Chart
Procedural Flowchart
Data Flow chart
What is Business Process Analysis
Business process analysis steps
How to Create a Business Process Diagram
How Does a Business Process Diagram Help Your Business?
Flowchart Tools
What is Algorithm
The algorithm can be defined as: “A sequence of activities to be processed for getting desired
output from a given input.”
Then we can say that:
1. Getting specified output is essential after algorithm is executed.
2. One will get output only if algorithm stops after finite time.
3. Activities in an algorithm to be clearly defined
Before writing an algorithm for a problem, one should find out what is/are the inputs to the
algorithm and what is/are expected output after running the algorithm
Properties of algorithm
Finiteness: An algorithm must always terminate after a finite number of steps. It means after every step
one reaches closer to the solution of the problem and after a finite number of steps algorithm reaches
an end point.
Definiteness: Each step of an algorithm must be precisely defined.
Input: Any operation you perform need some beginning value/quantities associated with different
activities in the operation. So the value/quantities are given to the algorithm before it begins.
Output: One always expects output/result (expected value/quantities) in terms of output from an
algorithm.
The result may be obtained at different stages of the algorithm. If some result is from the intermediate
stage of the operation then it is known as intermediate result and the result obtained at the end of the
algorithm is known as the end result.
The output is expected value/quantities always have a specified relation to the inputs
Example of Algorithm 1
Example of Algorithm 2
Here is an example of a finance problem that covers all properties of an algorithm:
Problem: Calculate the future value of an investment
Input: The initial investment amount, the interest rate, and the number of years
Output: The future value of the investment
Algorithm:
1. Calculate the future value of the investment using the following formula:
Future value = Initial investment amount * (1 + Interest rate)^Number of years
2. Return the future value.
Example of Algorithm
What is Flow Chart?
The flowchart is a diagram that visually presents the flow of data through processing systems.
This means by seeing a flow chart one can know the operations performed and the sequence of
these operations in a system.
Algorithms are nothing but sequences of steps for solving problems. So a flow chart can be used
for representing an algorithm.
A flowchart will describe the operations (and in what sequence) required to solve a given
problem
What is a Finance Flow Chart, or Workflow?

•Finance department employees perform hundreds – or thousands – of activities each day.

•These activities can be connected to form a business process, or workflow, that produces an
output of some sort.
• In finance, these outputs could include a financial report, invoice payment, internal audit, or
account reconciliation.
•There is a specific set of activities that finance employees follow to produce these outputs, or
“work products.” The sequential, visual representation of those activities is called a finance a
flow chart, or process map. These maps can be used to improve finance processes, or help
automate repetitive, transactional activities.
What Is Financial Reporting?

Financial reporting and analysis is the process of collecting and tracking data on a company’s
finances, including its revenues, expenses, profits, capital, and cash flow. Businesses use them to
inform their strategic decisions and stay compliant with tax regulations.
Cash flow is the net cash and cash equivalents transferred in and out of a company. Cash
received represents inflows, while money spent represents outflows.
Example of Cash Flow:
Cash received from customers: $10,000
Cash paid to suppliers: $5,000
What Is Reconciliation?

Reconciliation is an accounting procedure that compares two sets of records to check that the
figures are correct and in agreement.
What is Ledger?
A ledger in accounts is a book or record that contains all of the financial transactions of a
business. It is used to track the flow of money into and out of the business, and to generate
financial reports.
The ledger is divided into different accounts, such as cash, accounts receivable, accounts
payable, inventory, and fixed assets. Each account represents a different type of asset, liability,
or equity.
For each transaction, the amount is recorded in the appropriate account in the ledger. For
example, if a business sells a product on credit, the amount of the sale would be recorded in the
accounts receivable account. And if a business pays a bill, the amount of the payment would be
recorded in the accounts payable account.
What is Capital?
Capital in finance refers to the resources that a business or individual uses to generate income
or produce goods or services.
Capital is essential for any business to operate and grow. By investing in capital, businesses can
increase their productivity, expand their operations, and develop new products and services.
Here is an example of how capital is used in finance:
A company wants to expand its operations and build a new factory. To do this, the company
needs to raise capital. The company can raise capital by selling stock, issuing bonds, or
borrowing money from a bank. The capital raised will be used to purchase the land and
equipment needed to build the new factory.
Once the new factory is built, the company will be able to produce more goods and generate
more revenue. This increased revenue will allow the company to pay back the capital that it
raised to build the factory.
Flowchart Symbols
Flowchart Symbols
Flowchart Symbols
Flowchart Symbols
Flowchart Symbols
Flowchart Symbols
Flowchart Symbols
Flowchart Symbols
Flowchart Symbols
Flowchart Symbols
Steps to Draw Flow Chart
1. Explain the procedure
Determine the function and boundaries of the system or process you wish to depict in the flowchart. The process’s inputs, outputs, and
actions should be identified.
2. Choose the shapes and symbols
To represent the many process components—such as the start and end points, inputs, outputs, actions, decisions, and loops—choose
the right symbols and shapes. Rectangles, diamonds, circles, and arrows are the most often utilized shapes in flowcharts. To access all
shapes, enable Creately’s flowchart shapes library.
3. Organize the flow
Determine the order of the steps in the process and the different paths that can be taken. This will help you organize the flow of the
flowchart. Use Creately’s Plus Create to add the next shape and the connector in a single click.
4. Review and revise
Check that the flowchart accurately depicts the procedure and is simple to read and understand. If required, revise it to make it more
precise and understandable. Share feedback using Creately’s contextual comments.
5. Share the flowchart
Distribute the flowchart to coworkers, stakeholders, or clients who will need to use it or refer to it easily with a workspace link
Basic Flow chart
Basic Flowchart is often used to define and document basic work and data flows, financial, production and quality
management processes to increase efficiency of you business.
Basic flow chart for customer consulting:
Qualify the lead. Determine if the customer is a good fit for your consulting services and if they have the budget to pay
for them.
Schedule a discovery call. This is a chance to learn more about the customer's specific needs and goals, and to develop a
proposal.
Prepare a proposal. The proposal should outline the scope of work, the timeline, and the cost of your services.
Present the proposal to the customer. Be prepared to answer any questions they may have.
Negotiate the contract. Once the customer is happy with the proposal, you can negotiate the terms of the contract.
Begin work. Deliver on your promises and provide the customer with the best possible service.
Provide ongoing support. After the project is complete, continue to support the customer and help them achieve their
goals.
Basic Flow chart
There are many different types of financial consultancy services available, depending on the specific needs of the client. Some of
the most common types of financial consultancy services include:
Financial planning: Financial planners help clients to create and implement financial plans to achieve their financial goals. They
may help clients with budgeting, saving, investing, retirement planning, and estate planning.
Investment management: Investment managers help clients to invest their money in a way that meets their individual needs and
risk tolerance. They may develop investment portfolios, manage investments on behalf of clients, and provide advice on
investment strategies.
Tax planning: Tax planners help clients to reduce their tax liability and maximize their after-tax income. They may advise clients on
tax-efficient investment strategies, tax credits and deductions, and estate planning.
Insurance planning: Insurance planners help clients to assess their insurance needs and purchase the appropriate insurance
products. They may advise clients on life insurance, health insurance, disability insurance, and homeowners insurance.
Retirement planning: Retirement planners help clients to prepare for retirement financially. They may help clients to develop a
retirement income plan, save for retirement, and choose investment strategies for retirement.
Estate planning: Estate planners help clients to distribute their assets after death and minimize estate taxes. They may help clients
to create wills, trusts, and other estate planning documents.
Basic Flow Chart
Basic Flow Chart
Tariff Payment:
A tariff is a tax on goods and services that are imported into a country. It is levied by the
government of the importing country. Tariffs are used to protect domestic industries from
foreign competition, and to generate revenue for the government.
Here are some examples of how governments protect domestic industries from foreign
competition:
The United States imposes tariffs on imported steel and aluminum. This makes imported steel
and aluminum more expensive, which can make domestic steel and aluminum more
competitive.
Process Flow Chart
Process Flowchart is also known as the system flow diagram or SFD. The main reason of using
process flowchart is to show the relation between major parts of the system.
Workflow Diagram is use to create diagrams of information flow, business process automation,
business process re-engineering, accounting, management, and human resources tasks.
Procedural Flowchart

A procedure Flowchart involves creating a flow chart model that illustrates and analyzes the
overall flow of activities in producing a product or service.
Data Flow chart
Data Flow Diagram is a significant modeling technique for analyzing and constructing
information processes.
What is Business Process Analysis?

Business process analysis is a method that organizations use to increase efficiency. It involves evaluating
a process and finding ways to improve it.
Without a proper process analysis, you risk wasting valuable time on processes that are inefficient or
outdated
Business process analysis involves the following steps:
Identify a Process to Analyze
The first step is to determine the process that you are going to analyze. This means selecting an “as-is”
process — a current process you use in your business — to observe and analyze before you jump into
making any improvements.
Example :New hire onboarding, Purchase orders and Travel requests
Business process analysis steps:

Collect Data About the Process

The next step is to collect as much information as possible on the process you selected. Identify
the individuals (or stakeholders) involved in the process.
Then gather data about how they tackle the process, including when they do it, how often, what
tools they use, what written steps they currently follow (if any) and more
Business process analysis steps:
Map Out the Process
A typical business process can consist of numerous steps. Keeping track of the particulars of
each step isn’t exactly easy, especially for more complex processes. This is where business
process mapping comes in — visualizing a process from start to finish.
Creating a workflow allows you to visualize each step in processes like employee onboarding,
purchase order approvals, and more. It also helps you understand what individual stakeholders
are responsible for and the steps they take to complete a task.
Business process analysis steps:
Business process analysis steps:
 Analyze the Process
With a process mapped out, you should have a better idea of what you can improve. The main purpose
here is to identify any weaknesses in the current process and find ways to address them.
Ask yourself the following questions as you analyze the process:
Are there any steps that are causing delays?
What aspects are the most time-consuming?
Do stakeholders have the resources they need?
Can any steps be automated or even eliminated?
What are common complaints from the people doing the work?
Where are human errors likely to occur?
Why Should You Analyze a Business
Process?
Identify Causes of Delays
Your company likely already has policies for purchase orders. But if you don’t have a clearly
defined process, there can be delays in getting those documents out.
For example, if employees don’t know where to send purchase orders for approval, they’ll end
up wasting time trying to figure out the answer. Or they may send the purchase order to the
wrong person.
That’s an inefficiency that can lead to delays and slow down procurement. But it would be
difficult to pinpoint the reason for that delay without analyzing each step of a process map.
Why Should You Analyze a Business
Process?
Reduce Operational Costs
Making a process more efficient reduces overall operational costs, allowing you to get more
work done in less time. The result is a more productive workforce.
Let’s look at purchase orders again as it plays such a vital role in procurement. It’s also an
example of a process that benefits from continuous improvement — improving a process
through incremental changes.
Relying on a manual process to manage POs results in higher operational costs. Identifying and
addressing that bottleneck allows you to reduce cycle times and save money. use process
automation software to reduce cost
Why Should You Analyze a Business
Process?
Eliminate Manual Data Entry
Manual tasks like data entry are tedious and time-consuming.
Managers spend an average of 8 hours a week on manual tasks, while 25% spend at least 20
hours a week on such tasks. That’s valuable time that can be spent on more productive work.
Why Should You Analyze a Business
Process?
How to Create a Business Process Diagram

A business process diagram is a visual representation of a process that your company carries
out to achieve a goal. It uses standardized symbols to describe each step of the process.
You can use a business process diagram to depict anything from onboarding new hires to
developing and launching a new product.
Typically, a business process diagram will look like a flowchart. It could be a basic flowchart, or it
could be a more complex cross-functional flowchart that spans multiple departments.
Cross Functional Flowchart is often used to show the relationship between a business process
and the functional units (such as departments) responsible for that process.
How to Create a Business Process
Diagram
How Does a Business Process Diagram Help Your Business?

Increases Efficiency and Productivity

◦ 44% of organizations measured the return on investment (ROI) of their business processes through how
much time employees saved. The results? 66% of departments that prioritize automation say they
reduced time spent on manual tasks by 11–30%.

Reduces Business Costs

◦ A business process diagram breaks down each step of a process, which can help you identify
automation opportunities and lower operating costs.
Increases Transparency
With a clear process diagram, every team member can see what they need to do. Business process
models extend this idea, helping everyone see how they’re part of the larger picture.
How Does a Business Process Diagram
Help Your Business?
Creates a Record of Institutional Knowledge
When employees leave the organization, they take a lot of knowledge with them. If that information
isn’t documented, it’s likely gone forever. Creating a business process diagram and keeping it updated
helps preserve company knowledge.
Reduces Errors and Redundancies
When everyone knows their role in a business process, you’ll get fewer mistakes and fewer instances of
people doing the same work twice.
Improves the Employee and Customer Experience
Employees and customers appreciate when processes move quickly, whether that’s returning an item or
getting all your new hire documents signed.
With business process diagrams, you can speed up your processes while also keeping them accurate,
leading to better employee and customer experiences.
Flowchart Tools
Ms Visio
ConceptDraw
Smart draw
Trello
Canva
Frevvo
Reading
Read 7 Steps to Create a Business Process Diagram
https://www.frevvo.com/blog/business-process-diagram/
REFERENCES
https://opsdog.com/categories/workflows/finance
https://www.datapine.com/blog/financial-reporting-and-analysis/
https://www.conceptdraw.com/examples/diagram-of-financial-management
https://www.frevvo.com/blog/business-process-analysis/
https://www.frevvo.com/blog/business-process-diagram/