• Budgeting

Budgeting

The most important reason for financial management in any organisation is to ensure that the organisation knows how much money it needs, how to get the money it needs and then how to use that money to achieve its goals in an ethical, responsible and sustainable way. Strong financial structures make it much easier to report back to donors and gives donors confidence in the management of the organisation.  

This handbook looks at three different, but connected jobs that are involved in financial management; financial planning (future); financial control (present); and financial monitoring (past). The main goal of this handbook is to give a general idea of what financial management is and why it is important to a business or organisation.

Key concluding points are that:

• financial management is based on two very important principles; fnancial responsibility (managing finances in a responsible and sustainable way), and financial accountability (organisational accountabilitiy for where its money comes from and he way the money is spent) 
  
• financial planning is a process that an organisation uses to work out what resources it has available, what resources it needs and where extra resources can be found. The most important tools for financial planning are the financial strategy and the budget 
  
• financial control involves two elements. Firstly, it deals with the issue of financial responsibility within an organisation and, secondly, it deals with the issue of decision-taking and implementation 
  
• the final activity in the financial management process involves recording, analysing and reporting on the finances of the organisation. This is without any doubt the most time-consuming and labour-intensive activity in the financial management process because it is a never-ending and ongoing activity.

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