1. The importance of financial management.
Finance is the essential and regarded as the life-blood requirement of every organization (public or private, profit oriented or even non-profitable organization). The efficient management is closely linked with the efficient management of its finances. Resources are always limited, particularly in developing countries, compared to its demands or needs. So, the focus, is concerned with optimum utilization of resources, to take maximum benefit, in the form of output, from the limited inputs the organization has, to its greatest advantage. Despite that, good practice in financial management will help managers to fulfill commitments to stakeholders and donors being more accountable, gain the respect …show more content…
- Provide financial reports for regulatory bodies.
As part of the registration process, NGOs are required to be accountable for the money they raise and spend.
- Plan for the future and become more financially secure.
Plan to make sure that enough money can carry out the present and future objectives.
- Minimize fraud, theft and abuse of resources.
Good financial management includes internal controls that can help to stop fraud and protect the staff as well the assets.
- Enable staff to make better decisions on the use of funds.
Good project monitoring reports enable to plan the activities according to the budget available and fulfill objectives. Good cash flow management enables activities to be planned, items purchased when needed and staff paid on time.
- Achieve the objectives of the organization.
Good financial management will give the management team and board the information they need to ensure they are fulfilling the objectives of the organization and following the strategic plan.
- Enhance the credibility of the …show more content…
Controls always have to be adapted to different organizations. However, some controls that are often used include: Keeping cash in a safe place (ideally in a bank account); Making sure that all expenditure is properly authorized; Following the budget; Monitoring how much money has been spent on what every month; Employing qualified finance staff; Having an audit every year; Carrying out a 'bank reconciliation' every month - which means checking that the amount of cash you have in the bank is the same as the amount that your cashbook tells you that you ought to have. This last control is particularly important. It proves that the amounts recorded in the cashbook and the reports based on it are
Finance is the essential and regarded as the life-blood requirement of every organization (public or private, profit oriented or even non-profitable organization). The efficient management is closely linked with the efficient management of its finances. Resources are always limited, particularly in developing countries, compared to its demands or needs. So, the focus, is concerned with optimum utilization of resources, to take maximum benefit, in the form of output, from the limited inputs the organization has, to its greatest advantage. Despite that, good practice in financial management will help managers to fulfill commitments to stakeholders and donors being more accountable, gain the respect …show more content…
- Provide financial reports for regulatory bodies.
As part of the registration process, NGOs are required to be accountable for the money they raise and spend.
- Plan for the future and become more financially secure.
Plan to make sure that enough money can carry out the present and future objectives.
- Minimize fraud, theft and abuse of resources.
Good financial management includes internal controls that can help to stop fraud and protect the staff as well the assets.
- Enable staff to make better decisions on the use of funds.
Good project monitoring reports enable to plan the activities according to the budget available and fulfill objectives. Good cash flow management enables activities to be planned, items purchased when needed and staff paid on time.
- Achieve the objectives of the organization.
Good financial management will give the management team and board the information they need to ensure they are fulfilling the objectives of the organization and following the strategic plan.
- Enhance the credibility of the …show more content…
Controls always have to be adapted to different organizations. However, some controls that are often used include: Keeping cash in a safe place (ideally in a bank account); Making sure that all expenditure is properly authorized; Following the budget; Monitoring how much money has been spent on what every month; Employing qualified finance staff; Having an audit every year; Carrying out a 'bank reconciliation' every month - which means checking that the amount of cash you have in the bank is the same as the amount that your cashbook tells you that you ought to have. This last control is particularly important. It proves that the amounts recorded in the cashbook and the reports based on it are