Charity trustees and managers learn 12 key steps to good financial management at free masterclass

Stef Smith
Stef Smith, charities manager for Lovewell Blake

A dozen key indicators are vital to ensure a charity is being well managed financially – that was the message taken away by representatives from more than 20 Norfolk charities at the latest in a series of Charity Masterclasses being presented by Lovewell Blake.

Stef Smith, charities manager for Lovewell Blake

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.

Lovewell Blake charity finance specialists Stef Smith and Rebecca Frost outlined the 12 key indicators which make up a strong financial management plan for charities.

  1. Financial Responsibility: understanding the different levels of responsibilities of trustees, management and external advisers such as accountants
  2. Financial Controls: internal, documented controls to help trustees meet their legal duties to administer the charity’s finances and assets
  3. Risk Assessment: covering areas such as governance, operational, financial, external and compliance risks
  4. Budgets versus Strategy: ensuring plans are realistic, and identifying how much is needed to implement them
  5. Budget Setting: including identifying income and recording assumptions made in the budgeting process
  6. Budget Monitoring: maintaining good records and comparing actual financial position to budget
  7. Accounting Records: ensuring these are accurate and up-to-date
  8. Management Accounts: for use by different stakeholders, such as trustees, management, fundraisers, grant providers and auditors
  9. Cashflow: identifying income and expenditure timing, and where any gaps might fall
  10. Statutory Accounts: to meet legal and Charity Commission requirements
  11. Reserves Policy: a clear, concise policy which explains to funders, donors, beneficiaries and other stakeholders why the charity is holding reserves
  12. 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’. 

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