Financial management is a critical role in an organisation. During an organisation’s planning process, its leadership and staff decide what the organisation wants to achieve in the coming year. Then this is costed and a budget is drawn up. Budgeting is a key part of financial management and every organisational budget has to plan for the organisation to deliver its services and to be financially sustainable.
Financial management includes:
- Ensuring funds are used as agreed with donors
- Analysing income streams to predict shortages or over-budgeting
- Ensuring smooth cash flow so that the organisation can meet its commitments including paying bills and staff salaries on time
- Making decisions about priorities in consultation with senior management and directors
- Stewarding the funds and ensuring that there is a proper paper trail to account for the movement of money into and out of the organisation
- Adapting financially to changing environments and needs
- Ensuring the financial sustainability of the organisation and planning for the future.