From risk assessment to budget setting, cashflow to reserves, the latest masterclass, entitled ‘The Importance of Good Financial Management’, provided trustees and charity managers with a comprehensive checklist of things they need to have covered to ensure that their organisation is in a robust financial position.
- Financial Responsibility: understanding the different levels of responsibilities of trustees, management and external advisers such as accountants
- Financial Controls: internal, documented controls to help trustees meet their legal duties to administer the charity’s finances and assets
- Risk Assessment: covering areas such as governance, operational, financial, external and compliance risks
- Budgets versus Strategy: ensuring plans are realistic, and identifying how much is needed to implement them
- Budget Setting: including identifying income and recording assumptions made in the budgeting process
- Budget Monitoring: maintaining good records and comparing actual financial position to budget
- Accounting Records: ensuring these are accurate and up-to-date
- Management Accounts: for use by different stakeholders, such as trustees, management, fundraisers, grant providers and auditors
- Cashflow: identifying income and expenditure timing, and where any gaps might fall
- Statutory Accounts: to meet legal and Charity Commission requirements
- Reserves Policy: a clear, concise policy which explains to funders, donors, beneficiaries and other stakeholders why the charity is holding reserves
- Financial Reporting and Grant Applications: to give grant providers evidence of the charity’s financial position, and to monitor the spending of their grant
“Many charity trustees don’t come from a financial background, and arguably the most important of their responsibilities as a trustee is to oversee the financial management of the organisation,” said Stef Smith.
“It can be a daunting task, but by breaking it down into these 12 manageable parts, any charity trustee – and indeed manager – can ensure that the charity is being well managed financially, and is in a robust financial position.”
The masterclass was the second in a series of free masterclasses being presented by Lovewell Blake’s specialist Charity Team. The next masterclass takes place on 20th September, and looks at ‘How To Improve Success At Raising Funds’.