Importance of Financial Management for NGOs

Importance of Financial Management for NGOs

Importance of Financial Management for NGOs
  Importance of Financial Management for NGOs 

1-Introduction

Financial management is one of the most important aspects in business. In order to start up or even run a successful business, you will need excellent knowledge in financial management. So what exactly is this form of management and why is it important? Read on to find out more.
Financial management refers to the strategic planning, organizing, directing, and controlling of financial undertakings in an organisation or an institute. It also includes applying management principles to the financial assets of an organisation, while also playing an important part in fiscal management. Take a look at the objectives involved:   
 
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  • Maintaining enough supply of funds for the organisation;     
  • Ensuring shareholders of the organisation to get good returns on their investment;     Optimum and efficient utilization of funds;     
  • Creating real and safe investment opportunities to invest in.     
  • Financial management is also made up of certain elements. These include:     
  • Financial planning: This is the process of calculating the amount of capital that is required by an organisation and then determining its allocation. A financial plan includes certain key objectives, which are:     
  • Determining the amount of capital required;    
  • Determining the capital organisation and structure;     
  • Framing of the organisation’s financial policies and regulations.     
  • Financial control: This is one of the key activities in financial management. Its main role is to assess whether an organisation is meeting its objectives or not. Financial control answers the following questions:     
  • Are the organisation’s assets being used competently?     
  • Are the organisation’s assets secure?     
  • Is the management acting in the best financial interests of the organisation and the key stakeholders?     
  • Financial decision-making: This involves investment and financing with regards to the organisation. This department takes decisions about how the organisation should raise finance, whether they should sell new shares, or how the profit should be distributed.     The financial management department of any firm is handled by a financial manager. This department has numerous functions such as     
  • Calculating the capital required: The financial manager has to calculate the amount of funds an organisation requires. This depends upon the policies of the firm with regards to expected expenses and profits. The amount required has to be estimated in such a way that the earning capability of the organisation increases.     
  • Formation of capital structure: Once the amount of capital the firm requires has been estimated, a capital structure needs to be formed. This involves debt equity analysis in the short-term and the long-term. This depends upon the amount of the capital the firm owns, and the amount that needs to be raised via external sources.    
  • Investing the capital: Every organisation or firm needs to invest money in order to raise more capital and gain regular returns. Hence, the financial manager needs to invest the organisation’s funds in safe and profitable ventures.     
  • Allocation of profits: Once the organisation has earned a good amount of net profit, it is the financial manager’s duty to efficiently allocate it. This could involve keeping a part of the net profit for contingency, innovation, or expansion purposes, while another part of the profit can be used to provide dividends to the shareholders.     
  • Effective management of money: This department is also responsible for effectively managing the firm’s money. Money is required for various purposes in the firm such as payment of salaries and bills, maintaining stock, meeting liabilities, and the purchase of any materials or equipment.     
  • Financial control: Not only does the financial manager have to plan, organize, and obtain funds, but he also has to control and analyze the firm’s finances in the short-term and the long-term. This can be done using financial tools such as financial forecasting, ratio analysis, risk management, and profit and cost control.
NGOs should realize that managing their finances is of critical importance and they should incorporate necessary measures towards risk management, resource mobilization and budgeting. It is the responsibility of NGO leaders to plan their expenditures and investments and manage funds in a way that leads to a sustainable enterprise
 
The purpose of this guide is to introduce NGOs to basic financial procedures and systems that are required for efficient functioning of an NGO. By implementing the procedures and systems mentioned in the guide you will be able to manage your finances and accounts more competently.
 

What is Financial Management?

Financial Management is a vital activity in any organization. It is the process of planning, organizing, controlling and monitoring financial resources with a view to achieve organizational goals and objectives. It is an ideal practice for controlling the financial activities of an organization such as procurement of funds, utilization of funds, accounting, payments, risk assessment and every other thing related to money.
In other terms, Financial Management is the application of general principles of management to the financial possessions of an enterprise. Proper management of an organization’s finance provides quality fuel and regular service to ensure efficient functioning. If finances are not properly dealt with an organization will face barriers that may have severe repercussions on its growth and development.

There are several options that one can use for managing their finances, this could be either managing them on your own, hire a full time employee, hire a part time accountant or a third party who manages all finance related activities for you, for example a Chartered Accountant.

Most often organizations have a dedicated department that looks after the financial matters of the company. A finance manager is designated for handling finance and managing its resources within an enterprise. All finance-related decisions are taken at this position. Depending on the company profile the finance department can have several designations to cater to the various needs of the company.
Importance of Financial Management for NGOs
As a NGO you might be thinking your primary task is to work towards social service and not financial management. But unless your finances and funds are sorted, you cannot achieve your objectives. The primary significance of financial planning and management in NGOs lies in achieving its overall goals and objectives. Here are some points indicating the importance of financial management for an NGO.
  •  Being accountable to the donors: Most NGOs rely completely on funding and therefore having proper accounting systems in place becomes all the more important. As a NGO you need to be accountable to the donor agencies and individuals who support your cause. With proper systems in place you can keep track of your expenditures and submit timely reports to them. This would lead to enhanced trust between you and the donor, thereby increasing the chances of your NGO getting a continuous support from them. With limited funding it is important for an NGO to manage all the funds in a careful manner. Furthermore, proper finance systems will also help the NGO maintain financial reports and showcase their entire spending to the regulatory bodies as per the agreed terms.     
  • Securing future: The present financial condition of any organization determines its future. In a similar manner, NGOs should also opt for sustainable use of finance. This simply means that NGOs should spend in their present ventures, keeping in mind the future. After all, it is quite important to have future plans and become well secured as well as future-ready.     
  • Eliminating fraud and theft: Malpractices and illegal deeds such as overuse of resources, fraud and theft have become prevalent among NGOs. Firm checks are mandatory, for minimizing such illicitness and preventing abuse of resources. With complete financial planning, coordination and control, these issues can be easily addressed.     
  • Making productive decisions: With sound financial management, NGOs can make more productive decisions concerning resource allocation, fund raising, fund mobilizing and other undertakings. Good decision making skill enables right amount of funds to be invested at the right place. Funds are therefore efficiently and optimally utilized.     
  • Achieving objectives: Every NGO is guided by certain policies and procedures, which are related to its overall objectives. Each decision that is undertaken by the authority is driven towards successful achievement of its set goals and objectives. Without organizing finance, it will be difficult for the organization and its employees to reach its aim and fulfill purpose of its existence.     
  • Enhancing credibility: Managing finance is a matter of skills and tactics that ideally changes from time to time. With excellent finance management, NGOs enhance their image that enhances its value and making them more credible. By framing well defined financial plans and policies NGOs also earn good reputation within its community. They can also improve their current position and look forward to gain trust, faith and reliability.     
  • Strengthening fundraising efforts: Most of the NGOs solely survive on its funds. Well organized financial resources help in strengthening fundraising efforts by giving an overall idea about available finance and the amount of finance that needs to be accumulated. Thus, employees get a fair idea regarding the expected amount and plan their fundraising ventures accordingly.     
  • Process for developing Financial Policy of an NGO     
  • Developing a financial policy is a matter of time, effort and resources. Depending on the size of your NGO, the time required for developing a policy may vary and may take anything between ten days to few months. Once the first draft of the policy document is ready, it is it is reviewed and re-assessed to make it relevant to NGOs overall mission and vision statement.     The policy is generally developed though a series of brainstorming sessions where board members, senior team members discuss and formulate the policy.     
  • Ideally, financial policies are developed in the following stages:       
  • Assessing the need: The very first step in making a policy is to understand its purpose. NGOs need to address specific needs or objectives while making financial policies. Identifying the purpose will give a strong foundation and base to overall policy development. Therefore, it is the most significant stage in the policy making procedure.     
  • Identifying key roles & responsibilities: Once you the purpose of the policy, it is time to define important roles and responsibilities according to expertise. At this stage, key members are designated in their respective positions. Responsibilities are delegated to individuals, groups, sub-committees or working group, depending on organizational structure and functioning. Disseminating key roles also help in identifying important individuals/group, which shall be responsible for various aspects of financial management. It also helps in categorizing scope of financial tasks and activities and the lead person behind it.     
  • Gathering Information: While developing the policy you will need information related to financial resources, assets and other available sources of financial data. All such data should be accumulated, analyzed and then be used for framing initial policy content. It is best to gather whatever information is available from the market and then classify. By doing so, it will give a reflection of environment, factors and other features which might affect or help in making financial policy for a Non-Governmental Organization.     
  • Drafting policy: While many NGOs do the initial draft in pen and papers, others prefer doing in word doc. No matter which mode you opt, you need to be careful while choosing the words, language, length, complexity, style and tone. Words must be simple, without any jargons. Do not complicate the document that it is difficult to understand and implement its clauses. For a policy to be fair, realistic and acceptable, it is important to have a structured approach.     
  • Consulting with appropriate stakeholders: Stakeholders play a major role in formulating financial policies of NGOs. After the first draft has been prepared, it is best to involve the stakeholders since they are the ones, mostly moved by policies. Stakeholders can be anyone including individuals and organizations that might positively or negatively, directly or indirectly affect or be affected by the activities stated in the policy package. In ideal circumstances, stakeholders and policy-makers sit together and discuss about the potential implications of the financial policy. Based on whether the NGO decides to develop its internal governance or external policy positions, the appropriate stakeholders are consulted.     
  • Finalizing/Approving policy: After the stakeholder consultation, there may be certain changes in the policy document. After incorporating the changes in the policy, the Management Committee approves the policy. While approving the policy, the management committee discusses all the aspects of the policy with financial heads to ensure that the policy will be fruitful and productive in the view of achieving its objectives and meeting its purpose.     
  • Considering other procedures/measures: Whether for internal or external policies, essential procedures need to be developed for providing necessary support. These procedures are established after considering the need for clear guidance towards implementing the policy and the responsible people behind the execution. All the procedure-related decisions, which will further affect the implementation of the policies, are taken at this stage.     
  • Implementing: Once steps have been taken the clauses of the policy are communicated with the target audience. Proper training and guidance is provided to the staff and volunteers to support and enhance the quality of policy execution. Multi-national NGOs often conduct conference to spread awareness about their financial policy.     
  • Monitoring & Reviewing: In order to ensure that policy gets implemented in the best possible way, constant monitoring, reviewing and revision are done. It is seen that monitoring systems and reporting modules are accessible and responsive. By establishing suitable reviewing systems, policy heads can keep a firm check on overall execution of policy and be sure about its proper functionality. In case it is seen that the policy has loopholes in certain sections, the same is amended and fine-tuned for best results. Monitoring and reviewing gives an overall assessment about the ultimate benefits of framing the policy.     
  • Important questions to ask, before developing a Financial Policy for NGO     
  • Since preparing, drafting and making a financial policy consumes lot of time, policy-deciders must consider the most significant and relevant factors, before getting into actual discussion about the policy. Of all these factors, budget processes and systems within an NGO have maximum effect on financial policies. Therefore, financial policy strategists ask potential questions to have clear understanding about the overall organization and more importantly, its financial aspects.     
  • After jotting the answers to all questions, financial policy strategists can consider it as a primary data to proceed into further discussions about develop inancial policy.     
  • Q1: Does the organization have a board-approved budget at the beginning of fiscal year?     
  • Budgets are one of the most important things to consider, while drafting financial policy. It is the budget that determines organizational expenditures and helps in planning those expenditures throughout the year. When NGOs have board-approved budgets before or at the start of fiscal year, goals and objectives become clearer and stakeholders are guided to their actions.     
  • Q2: Are the financial goals set before the beginning of budget development process?     Financial policy development is dependent on budget development and these policies must adhere to the overall budget plan. Therefore, it is best for NGOs to have financial goals in addition to their overall objectives, as a part of their annual planning process.     Q3: Does the budget development process include revenue budget and expenses by program/function?     
  • NGO budgets must be ideally constructed by a program/function, thereby giving proper insights and clear understanding about the actual costs that needs to be incurred for conducting different activities. Policies contain specific sections that are dedicated to planning revenue budgets and spending. Therefore the budget development process affects these section plans.     
  • Q4: Does the budget process include strategy development for funding overhead costs?     
  • If budgets don’t define strategic development of overhead costs funding, then it is the financial policy that needs to address it. NGOs are often faced with challenges such as securing funds for its administrative costs, raising unrestricted funds and developing earned income streams. These challenges must ideally get a solution either through budget or through financial policy.     
  • Q5: Does the organization have year-end predictions at regular intervals throughout the year?     
  • A clear understanding about where the organization is likely to finish the year, gives an overall direction about financial policies. It also allows proper financial management and measuring the intended results, both of which can be guided through the policy. Often NGOs draft their policy, at par with the budget to address such predictions throughout the year.     
  • Q6: Does the organization have a process for evaluating funding avenues before applying?     
  • When organizations have funding opportunity evaluation process, policies must clearly define strategies for doing so and must support these processes. In case, such processes are not practiced, policies have a dual role: to define the objectives and goals behind funding avenues and strategizing it for better understanding.     
  • Q7: At what intervals does the organization produce reports to the management committee?     
  • Financial reports are submitted to the senior management, either on quarterly basis or on monthly basis. While drafting a financial policy, this interval must be considered as the policy contains information that will guide the management committee and help them in assessing if the overall performance and progress of the organization.           
  • Q8: Does the organization use dashboards to highlight key indicator performance?     
  • Dashboards are nothing but visual representation of selected KPIs (Key Performance Indicators) through which decision-makers are briefed about the current standing of the organization, against its set goals and objectives. If the organization is not taking KPIs, then financial policies must address to such important needs and state it under their evaluation and monitoring procedure.     
  • Q9: When does the organization forecast year-end financial result?     
  • Financial policies must be prepared through potential assumption of where the organization is likely to end, from a financial perspective. Policy-makers can sit with finance heads and hear their views on this aspect. Accordingly, policies should be made to ensure that its outcome aligns with organizational goals, at the ultimate stage.     
  • Q10: Does the finance staff have proper understanding about job descriptions?    
  • One of the most significant points to be addressed in the finance policy is defining the roles and responsibilities of all financial positions. Policies must consider recent up gradations in work and match pace with current trends that are being practiced in other NGOs. Financial policy must clearly define designations along with the bunch of duties and responsibilities.     
  • Q11: Does the finance staff receive proper training and guidance?     Financial policies must address the need for proper training and guidance of its financial staff. It must formulate strategies that will help in conducting training programs and sessions so that financial staff gets more educated and are informed about their scope of work.     
  • Q12: Are the finance staff aware about the organizational goals and objectives?     
  • Since financial policies mostly cater to financial aspects with the organization, often the big picture gets ignored. Therefore, such policies should ideally be prepared in a manner that will clearly communicate the organizational aims and objectives along with financial goals so that the financial staff can have clarity in understanding overall objectives and how these policies are related to these objectives.     
  • Q13: Does the finance office maintain an annual calendar of important events and activities?     
  • NGOs have a continuous list of ongoing events, activities and ventures, round the year. Financial policies must address the needs and requirements for carrying out planned activities, successfully. If events have already been planned, policies must provide guidelines to govern and execute the destined activities.     
  • Q14: Does the organization have fiscal workflow processes?     
  • Fiscal workflow processes are designed to minimize manual data entry, reliance on paper and duplicative work. Policies must define suitable technologies according to the fiscal workflow process of the organization with a view to increase efficiency and reliability of operations.     
  • After finding the most relevant answers to the above questions, policy-makers then start thinking about all sections to be covered in the policy, specific sections that require more emphasis and new things to be incorporated, if any. Accordingly, they proceed towards planning and drafting the financial policy of the organization.     
  • Structure of Financial Management Policy     
  • All financial decisions, activities and plans are done in accordance to a set of procedures that form the basis of the financial policy. Once the financial objectives are confirmed, the next move is to frame policies to guide its further proceedings. Financial management policy of an NGO is a manual that covers all the accounting policies, procedures and systems of the organization. Primarily, there are two purposes for framing a financial policy                                         
  • To look into proper governing of the financial transactions taking place in the concern so that the staff can abide by the set procedures and     
  • To fulfill requirements of local statutory bodies and establish strong management practices, as adopted by the NGO.     
  • 6.1 Principle of Financial Policy: While developing a financial policy it is a good practice to incorporate the following seven principles suggested by experts. These principles lay the foundation of an effective financial policy which would ultimately result into a healthy organization.
1-Consistency: The financial policy should be consistent, which simply means that it should not allow manipulation of processes and systems. All the staff members should consistently adhere to the financial policy and there should not offer much flexibility. A consistent policy will ensure better accountability, transparency, better information dissemination and timely reporting  
2-Accountability: The financial systems should be such that it makes the organization more accountable to its stakeholders. As an NGO all you should account for all the resources and its expenses. For this the policy should clearly indicate the procedures for reporting and publication of financial data  
3-Transparency: An organization should disclose all its operation and provide necessary information to stakeholders. This means that the NGO should provide accurate and timely information to donors, beneficiaries and all relevant stakeholders.  
4-Viability: For an NGO to be viable in the long run, the policy should set in place a mechanism that would maintain a balance between its expenditure and income. For any organization to be viable it is important that team leaders are able to generate sufficient funds to continue the functioning of the NGO.  
5-*Integrity: All team members should follow all rules set by the financial policy. As a founding member you should set precedence in following and adhering to all rules. 
6-Oversight: The policy should also provide oversight into the future and should accordingly suggest measures to cope with future challenges. This would include risk assessment; strategic planning etc. 
7-Accounting standards: The policy should be such that it incorporates valid national standards and protocols. The accounting systems should meet national and international standards of financial accounting and recordkeeping this would facilitate easy transactions between diverse funding strategies. 
8-Scope of Policy & Procedures: Financial management policy throws light on the procedures, systems and accounting policies that are prevalent in the organization. The policy contains information about input, output, processing, control and distribution of financial data. The accounting policies and procedures are set out to: 
  • Make certain that the books of accounts of the NGO are carefully prepared to confirm its accounting principles and practices.     
  • Enable NGO’s authority and management heads to procure timely and accurate financial reports on every month. This also fosters stable financial management.     
  • Ensure that funds and other resources are being used in an accountable and correct manner. Also, make sure that financial approach is in line with accounting principles and best practices in reporting organization’s requirements.     
  • This document is not just necessary for you to manage your finances and accounts, but this would also help you in complying with legal protocols. The policy will cover the flow of financial data within the organization that would ensure that the health of your NGO in terms of finances remains good. Having a sound financial policy in place will certainly enable you in keeping track of the NGOs expenditure, basis which you can plan your fundraising strategy.     
  • 6.3 Purpose of Policy & Procedures: Financial policies and objectives have the following significant objectives:     
  • To provide assistance in maintenance of controls.     
  • To serve as a training and monitoring resource.     
  • To be a reference document to be used by the management, employees, auditors and stakeholders.     
  • To increase accuracy and completeness of data that is posted from source documents (invoices, journals, cashbooks, payment receipts) to the computerized system.     
  • To offer accurate and credible reports so that management can exercise effective control over organizational operations.     
  • To detail-out the administrative and operational procedures for input, output, processing and distribution of information so as to ensure complete security and privacy of files and documents.     
  • Components of Financial Management     
  • The most important section of a financial management policy of an NGO is the procedures for accounting. The accounting procedures describe the methods that the organization has adopted for maintaining daily accounts and carrying out day to day activities. The accounting policy describes both the external and internal controls that are in use by the organization. Accounting system of an organization should deal with the following;     
  • Funding Agreement: One of the most important documents for your finance and accounts department is the funding agreement between the donor and the organization. The agreement should typically have details related to:     
  • Deliverables: Clear mention of all the deliverables that are agreed between the donor and the NGO. both quantifiable and qualitative deliverables should be spelled out to avoid confusion at a later stage     
  • Budget Breakup: The agreement should clearly specify the funds allocated for individual activities. This will help you in spending as per the allocated funds and would reduce over-expenditure.     
  • Deadlines: All the deadlines should be clearly mentioned in the agreement.     
  • Reporting procedures: Monthly, quarterly, annual reporting procedure both for narrative and financial dealings should be specified.     
  • Fund release schedule: Procedure related to the release of payments should be clearly mentioned.     
  • Clear demarcation of financial and non-financial aid.     
  • Bank Accounts & Transaction: In most countries, registered NGOs have a bank account and prefer to deal with their finance through banking facilities and services. The NGO financial policy should clearly state the various procedures to be followed to ensure consistency in all transactions.     
  • Bank Accounts: Bank accounts for all project funds are typically opened in nationally recognized banks or those banks which are authorized by the central bank of the country. Depending on the laws related to your country, you can open a bank account for your registered NGO.     
  • Authorized Signatories: Depending on the resolution of your board, you can wither have a single signatory or two-signatories for your bank transactions. Make sure your policy clearly spells out who is the authorized signatory for all baking instruments.     
  • Manage Bank Transactions: Bank receipts are acknowledged by delivering an official receipt. The date of receipt, its accounting as well as the date of depositing the cheque-draft to the bank account are the same. In the policy also mention who will be responsible for managing all bank transactions.     
  • Cash Handling & Transaction: Cash payments are firmly documented by NGOs in their financial management policy. Small amount of cash payments are quite common on daily basis, therefore you should have procedures to deal with such transactions.     
  • Cash Account & Transactions: Cash transactions are resorted in case of small expenses and when/where banking services are not available. Refer to your country laws related to cash payments and procedures set by law. In certain countries, there is a certain limit, exceeding which no claims can be settled through cash payments and these should be by account payee cheques only.     
  • Daily Cash Balance: Closing balance cash denomination are entered under the Daily Cash Balance section and signed by the accountant. This register is usually maintained right from the beginning of the financial year.     
  • Withdrawing Cash from Banks: When there is a need to withdraw cash from banks, make sure that you use a Cash Withdrawal Form/Money Indent. This form should be duly filled up and signed by the staff, involved in handling cash. Try to avoid cash transactions as much as possible as they do not leave any accounting trail and hence can be questioned at a later date. If there is no other option left then follow proper procedure so that the transaction can be recorded.     
  • Cash Payments: For making cash payments, most organizations use a payment voucher. All the vouchers are printed and have an individual serial number. When a cash payment is to be made, the voucher is approved by the responsible authority. The payee also signs the voucher on receiving the payment. This voucher is then filled and recorded.     
  • Cash Verification: It is mandatory to verify the cash balance at the end of the month. The competent authority ensures that the cash account record has been signed by the person handling cash and the person handling finance. In case of any discrepancy noticed during this period, the physical verification is recorded and reported in written document to the concerned person immediately.     
  • Controls to be exercised: Some of the important controls which are in practice include:     
  • No access to third parties towards the safe or accountant. Cash is only paid to third parties in front office.     
  • Only one person is designated to handle cash and is solely responsible for it.     
  • A fixed time period is specified for cash disbursements. Emergency payments can only be released during other times.     
  • Strict observance of minimum and maximum cash limits.     
  • Cash receipts/payments accounting is done on day-to-day basis.     
  • Petty Cash: Petty cash is a system that is used for tracking small purchases that aren’t suitable for check or credit card payments. Petty cash is maintained based on imprest System (a form of financial accounting system). The base characteristic of an imprest system is that a fixed amount is reserved, which after a certain period of time or when circumstances require, because money was spent, it will be replenished. Clearly specify a limit of imprest level in your policy. The accountant is the one and only designated person for handling petty cash. Actual cash is checked on spot and then confirmed by the finance manager. The person in charge of funds will reimburse for any incongruity. All petty cash requests are duly signed by authorized supervisor/finance manager on pre-numbered voucher.     
  • Cash book maintenance: Cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals. The cashbook is an important bookkeeping document for any organization. It is a book of entry which is prepared following a voucher for a particular transaction. Maintaining a cashbook helps in keeping a record of all transactions in which cash/bank receipts are involved. There are various ways of maintaining a single column cashbook or a double column cashbook. In the former case, it also acts as a bankbook whereas in the latter, a bankbook should be maintained separately.      
  • Cashbook is devoid of any alteration or cutting. Any correction fluid is never used in cashbooks. In case of any mistakes, it is corrected by passing an entry of rectification.     
  • Cashbooks are regularly written to maintain transactions, up to date. Cash balances are also inked up, on daily basis.     
  • The competent authority tallies, checks and signs the cashbook, on monthly basis     
  • Stock & Inventory Management: Since NGOs receive good amount of funding, execute various activities and expand their organization, they need to purchase goods and service. NGOs always organize their purchase plans and incorporate the same in its financial management policy.     
  • Stock & Inventory Management: Maintaining a proper Stock and Inventory list prevents excess purchase and reduces wastage. One should keep a register to keep a tab on Stock. Additionally for large organizations following the 5S principles can be of extreme help. The implementation of these principles reduces inefficiency, abnormality, waste or unsafe condition in your office. The activities performed in these steps, in short, are described as follows: Marking of re-inventory level for stock can help in timely replenishment to prevent brake in work. The Stock and Inventory registers should be audited and monitored periodically, preferable every fortnight.     
  • Purchasing: It includes identifying prospective needs for goods and services, identifying costs to cover needs for those products, identifying potential suppliers and procuring at least three estimates and finally getting into negotiation about trading terms and conditions. After mutual agreement on payment terms, orders are placed. Goods/services that had been ordered are received and paid. After complete payment, accountings and archiving expenditures are prepared.     
  • Identifying the supplier: The most potential suppliers are identified by their credibility to supply the requisites on time, cost-effectiveness of the commodities and quality of goods supplied. Local and well known suppliers are more reliable to work with. While selecting a supplier, past performance, reputation and availability are more emphasized. Also, it is ensured that the supplier must comply with the rules and regulations, as stated by the Government. It is advisable to take quotes from 3 to 4 suppliers before finalizing one based on quote and reliability.     
  • Maintaining Stock Register: Stock Register keeps record of all goods that are purchased and stored. Usually, an enclosed format is maintained while entering details in the stock register. The stock register is preserved at the office where the goods are purchased or stored centrally. With arrival of fresh stock, the register needs to be updated with accurate quantity and other data. All requisitions taking place in the NGO must be numbered in duplicate. Two copies are to be maintained: one for the central and the duplicate for the accounts. The records are entered on FIFO (first in first out) basis. The stock registrar is designated for managing all stock records and its aligned functions.
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                                                          Yusufu Koryama Banya, BSc (Hons),Dip, MFA,PGC,ACCA,Finance Lawyer
About:
I am an Administrative/finance and Operations Management Manager. My experience in this field with several entities both Local/international Agencies and private sector allows me to serve as an Administrative/finance or Operations Manager  I have been working with KPMG Sierra Leone for a period of four years and the rest of the time I was with INGO’s .
I have the ability to work with people of different nationalities and multi-cultural environment and I am very keen to contribute a lot of my experience to any organization that needs. Gained extensive knowledge in Managing Large Complex Projects. I have implemented complex emergencies like the Ebola in Sierra Leone and chronic conflicts through normal programming, cash transfer programming, cash for work using mobile money transfer technology. 
 
Is experienced in working with downstream local partners and community based organizations. Able to perform under pressure and keen on details and meeting deadlines. Well conversant with budgeting, reporting and compliance requirement of major donors such as EC/EU, DFiD, CIDA, UN Agencies (UNICEF, WFP, UNDP), USAID, SIDA among other donors.   Have been a member of the senior or country management team for more than 5 years; participating and contributing to strategy development and leading discussion on strategic financial decisions. 
 
Experience in Enterprise Resource Planning (ERP) system, SAP and accounting software ACCPAC, PeopleSoft, Great Plain and Sun System. Keen in constant improvement of internal business processes aimed at promoting accountability and effectiveness and reducing control environment and risks. A trainer of finance and non-finance staff in general financial management, and grant management and reporting. A volunteer with local organizations; supporting their internal business process and offers advice on financial management.   I have excellent command of English language.

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