Tips tools for ngo financial management

Tips tools for ngo financial management

Tips & Tools for Tips & Tools for NGO Financial NGO Financial Management Management Denise Phelps Denise Phelps Treasurer Treasurer MD School for the Deaf & Civitan MD School for the Deaf & Civitan Club Club NGO Financial NGO Financial Management Management  Do More with Less Do More with Less  Sources of Income Inconsistent Sources of Income Inconsistent  Mission-driven, not Financially-Driven Mission-driven, not Financially-Driven Staff Staff  Small Purchaser of Goods & Services Small Purchaser of Goods & Services  Comply with Donor Requirements Comply with Donor Requirements NGO Financial Tools NGO Financial Tools  Policies & Procedures Manual Policies & Procedures Manual  Record Financial Transactions Record Financial Transactions  Monitor & Control Expenses Monitor & Control Expenses  Satisfy Reporting Requirements Satisfy Reporting Requirements  Ensure Timely & Accurate Reporting to Ensure Timely & Accurate Reporting to Donors and Grant-makers Donors and Grant-makers NGO Financial Tools NGO Financial Tools  Record Record  Revenues – all types Revenues – all types  Expenses – all types Expenses – all types  Assets – All things owned by NGO Assets – All things owned by NGO  Liabilities – Money owed to others Liabilities – Money owed to others  Donors can see their money is being Donors can see their money is being spent and decide whether to give more spent and decide whether to give more Processes Processes  Programme Funding Programme Funding  Goods & Services Requisition Goods & Services Requisition  Cash Disbursements Cash Disbursements  Updating the Cash Book Updating the Cash Book Director/Finance Director/Finance Officer Officer  Responsibilities Responsibilities  Make all general ledger entries Make all general ledger entries  Verify information Verify information  Produce and distribute financial reports Produce and distribute financial reports Monthly Monthly  Record expenses by project Record expenses by project  Record non-project expenses Record non-project expenses  Record grants/income received Record grants/income received  Run trial balance Run trial balance  Record accrued expenses Record accrued expenses Cash Management Cash Management  Cash is accounted for in General Ledger Cash is accounted for in General Ledger  Cash is deposited correctly Cash is deposited correctly  Separate cash handling from recording Separate cash handling from recording  Payments are verified and approved prior Payments are verified and approved prior to disbursement to disbursement  Vouchers and invoices are marked paid Vouchers and invoices are marked paid  Bank reconciliations are done timely Bank reconciliations are done timely Bank Reconciliation Bank Reconciliation 1. 1. Record bank charges into cash book Record bank charges into cash book 2. 2. Record any other debits or credits that are Record any other debits or credits that are not in the cash book not in the cash book *Ensure they are all legitimate *Ensure they are all legitimate 3. 3. Prepare Reconciliation Prepare Reconciliation Balance on bank statement Balance on bank statement - - Unpresented cheques/charges Unpresented cheques/charges + Outstanding deposits/credits + Outstanding deposits/credits = Cash Book Balance = Cash Book Balance Donor requirements Donor requirements  Expenses have to be: Expenses have to be:  Reasonable Reasonable  Allocable Allocable  Allowable Allowable [...]... after audit to Donors Financial reports 90 days after end of fiscal year  Include impact reports, explanations, etc with financial statements Additional Information     Payroll Corporate Governance Computer Information Systems Appendix     Bank reconciliation Budget Book Fixed Asset Register Comparative Quotation Chart QUESTIONS??? Thank you for participating today! Contact information – Denise...Budgeting – Why?  Most important part of Financial Management  Where do you want to go and how do you want to get there?  Gives a tool for checkpoints along the way  Allows you to spot trouble areas and devise plans to address them  Provides a benchmark for donors to grade your performance against projections Budgeting – How?  Gain input from everyone when... Fixed Assets Tips  Verify and inventory all fixed assets at the end of the period  Make sure you are personally seeing the inventory at least once per year (vehicles, laptops, etc.)  Keep receipts of all fixed assets with any applicable warranty information  Decide whether to sell any assets that you are not using or will need to use in the future Travel  Travel is planned for in advance for budget... approved before incurred  Travel expenses are accounted for with receipts before paid  Travel adheres to donor requirements  Travel should be at lowest cost - economy class, travel on non-holiday weekdays, etc Goods & Services  Procurement principles    Competitive Bidding Transparency Supremacy of the tender committee/procurement officer  Excluded parties    Employee, officer or agent of NGO. .. of NGO Specification development contractor Excluded by donor agreement Goods & Services  Request for Bid  Responsibilities/specifications/type of service  Minimum qualifications  Terms of Service  Deadline for submission  Deadline for completion  Compare at least 3 Suppliers Goods & Services Tips        Annual goods and services needs Collective buying opportunities Bulk or early payment... prevent cash flows issues  Income with date to be received  Expenses with date to be paid Budgeting Tips  Once budget is created:  Increase expenses and decrease income by 10% to see if there would be any trouble areas created  Look for opportunities to    Buy in bulk for lower cost Prepay for cost savings Set-up payment plans to spread out cash payments  Share with staff/board/donors to see... staff/board/donors to see if they spot trouble areas  Gain necessary approval and record Budget change approvals    Change in scope of project Change in key personnel to carry out project Need for additional funds, due to unforeseeable events  Transfer of funds from one line item to another  Costs prohibited by the grant agreement are incurred Fixed Assets  Ensure they are recorded on balance sheet  Reflect . Tips & Tools for Tips & Tools for NGO Financial NGO Financial Management Management Denise Phelps Denise. Phelps Treasurer Treasurer MD School for the Deaf & Civitan MD School for the Deaf & Civitan Club Club NGO Financial NGO Financial Management Management  Do More