The board and finance committee responsibility includes ensuring that financial policies and procedures exist and are followed by the organization. Staff management is often delegated the responsibility to develop and maintain financial policies and procedures with limited direction or guidance from the board and finance committee. The board and finance committee can be consumed by more immediate financial matters like budgets, audits, financial statements, and cash flow.
Financial Policies and Procedures help sustain and strengthen your organization by defining:
• How the accounting function is performed including transaction processing like accounts payable, account receivable, payroll, journal entries, and grants and program management?
• What authorization and custody controls exist to reduce financial risks and protect organization?
• What environment and culture exist for your organization, how is authority defined, and what external influences exist?
• How does your accounting system help you implement your financial policies and procedures?
• What segregation of duties and controls exist to detect or prevent accidental or intentional mistakes?
• What training do you provide to ensure competence and knowledge of accounting staff?
It is important that you compare your major transaction processing (A/P, A/R, Payroll, etc) transactions to best practices and evaluate costs versus benefits for each transaction process. If you have not reviewed and improved your financial policies and procedures recently then an experienced outside perspective, like FTM's, can help. An organization with good financial policies and procedures benefits from operating efficiencies, clear expectations, financial accountability, and better training.
More Information - At the end of this article is more detail about how financial policies help sustain and strengthen your organization. Read it at:http://www.ftmllc.com/Library-articles.htm
FTMs next nonprofit webinar will provide more details and will be held on Thursday, July 25th at 12:30 EST. You can register by emailing us firstname.lastname@example.org or calling us at 317-819-0780.
Financial Technologies & Management (FTM) has been a supporter of the Not-for-Profit News for eight years. They are a full service CPA firm providing bookkeeping, accounting, controller, CFO Advisor, and Software Advisor services to over 350 nonprofit and religious organizations since 1999. Contact them at 317.819.0780 or email@example.com to see how they can help your nonprofit organization.