Financial Management Essay

1731 words - 7 pages

The secret of good financial management is to keep things simple, develop routines and get into good habits. People sometimes worry that financial management will be a very complicated, difficult and intellectual process. But in fact the best financial systems are very simple and easy to follow. The more complicated the system, the greater the chance that something will go wrong or that someone will make a mistake.

Remember, the legal responsibility for financial management lies with every member of your management committee and not just the treasurer. Your management committee and members must know who is responsible for the financial tasks in the organization and these should be ...view middle of the document...

Refugee community organizations that are set up as companies, or which are charities with an income over £100,000, have to prepare their annual accounts. However, their books and records which they keep themselves during the year can still be kept on the more simple ‘cash’ basis. Accrual accounts reflect not only what happened in a period (usually one year. For example, if you receive an electric bill the day after the year-end, in accruals accounting it would be included. So, unless you like making things complicated, stick to simple cash based accounting for your own system.

This content is adapted from information provided by the ‘Community Accounting National Network’. All organizations should aim to have some money held in reserve. Organizations have been criticized in the past for accumulating too much in reserve and not spending it on achieving their objectives. For small organizations, however, finding enough money to create any reserves at all is likely to be a bigger problem.

There is no set figure, but it is widely accepted that the general or uncommitted reserves should be maintained at a level approximately 25% of your organization's average annual expenditure. Some would say that this is the minimum, and that to have less is being at risk. Each organization should consider its own situation.
How secure is your future income?  What is the value of your obligations under any contracts?  How much would it cost you to close down?

A budget is the estimate of the income (receipts) that you hope to receive and the expenditure (payments) you expect to incur. Your organization should draw up annual budgets for individual projects and events, and for overall activity each year.

The Plan

Monitoring and Revision

Fill in the Figures

Approval

Make Notes

Revise the Figures

To make sure your organization doesn’t run out of money during the year, you need to break down the budget and forecast cash flow month-by-month. Like the budget, the cash flow forecast is a prediction of what will happen, and in order to be of use, it needs to be prepared before the beginning of the financial year for which it is intended.

   

Grants are often received in installments Telephone bills usually arrive every three months Your organization may be more active in the summer months and less in winter There may be end of year costs associated with the preparing of independently examined accounts and annual reports.

The forecast allows your organization to identify and plan for any possible cash flow problems.

Book keeping means recording financial transactions in an orderly and systematic way. Bookkeeping is necessary so that information regarding the financial position of your organization is readily available to the members, trustees and funders.

BOOK KEEPING

CASH BOOKS

PAPER RECORDS

Bookkeeping should require as few ‘cash books’ as possible. For most refugee community organizations only three...

Other Essays Like Financial Management

Financial Management Essay

3112 words - 13 pages Financial Management Part Two: 1. What do you understand by wealth maximization? Ans : A process that increases the current net value of business or shareholder capital gains, with the objective of bringing in the highest possible return. The wealth maximization strategy generally involves making sound financial investment decisions which take into consideration any risk factors that would compromise or outweigh the anticipated

Financial Management Essay

2210 words - 9 pages courier pharmacy service, while United Pharmaceutical Distributors (UPD) is South Africa's leading full-range national pharmaceutical wholesaler. The Clicks group was ranked third in the Financial Mail Top Companies 2014 survey and the highest retailer. CLICKS FINANCIAL FIGURES: YEAR | 2014 | 2013 | 2012 | 2011 | 2010 | Current Assets | 4420 | 3843 | 3268 | 2840 | 2727 | Current Liabilities | 4339 | 3816 | 3138 | 3025 | 2672

Financial Management

2535 words - 11 pages Chapter 1 An Overview of Financial Management Learning Objectives After reading this chapter, students should be able to: ◆ Explain the role of finance, and the different types of jobs in finance. ◆ Identify the advantages and disadvantages of different forms of business organization. ◆ Explain the links between stock price, intrinsic value, and executive compensation. ◆ Discuss the importance of business ethics and the

Financial Management - 2473 words

2473 words - 10 pages invest in security and management application to manage their risks. These midsize companies have been under served in the technology market. They are tired of always dealing with a reactive IT situation. Therefore, HP introduced a new product called HP Site Scope Operation Manager. This software can better monitor systems and predict issues that may stop a small business in their tracks. HP was well aware of the limited funds the midsize companies

Financial risk management 2

561 words - 3 pages Financial risk management From Wikipedia, the free encyclopedia Financial risk management is the practice of creating economic value in a firm by using financial instruments to manage exposure to risk, particularly credit risk and market risk. Other types include Foreign exchange, Shape, Volatility, Sector, Liquidity, Inflation risks, etc. Similar to general risk management, financial risk management requires identifying its sources, measuring

Financial Management Report

597 words - 3 pages Financial Management APC308 Individual assignment Weighting – 100% of the marks for this module This is an individual assignment of about 3,000 words. Requirements: You are the senior financial manager in a large listed company, Carr plc. The directors of the company have identified a potential project, which they hope will be successful in increasing the wealth of the shareholders. The project will involve the purchase

Financial Risk Management Assignment

2345 words - 10 pages FRM 1. (a) The type of mortgage-related default risk (systematic or non-systematic) depends on the reason of default. Reasons of default such as unanticipated increase in interest rates, and falling home prices make the default risk systematic. As these factors affect the financial industry as a whole and are present everywhere, they cannot be diversified away, but can be hedged. On the other hand, reasons of default that are borrower

Case Study Financial Management

2613 words - 11 pages | FINANCIAL MANAGEMENT-CASE 2 | | | CRISTINA CARRILLO BEN GRAHAMVIRGINIA MARTINEZPABLO MEDINA | | | A. JANUARY 2005 (A.1) Firm values We need E[EBIT] and r0. Due to V=E+D= E[EBIT]/r0 : | E[EBIT] | r0 | V | Firm 1 | 2000 | 8% | 25000 | Firm 2 | 480 | 8% | 6000 | Firm 3 | 700 | 8% | 8750 | (A.2) Share values We need the value of equity and the number of shares in order to compute share values

Global Financial Management

2673 words - 11 pages delay moving to the decline cycle. Management |Micky Arison, Chairman of the Board | |From 1979 until 2013, Mr. Micky Arison was Chief Executive Officer of Carnival Corporation, the world's largest cruise operator, and owner | |of the NBA's Miami Heat. On June 25, 2013, Carnival Corporation announced Mr. Arison was being replaced as CEO by

Questions Chapter 14 Financial Management Principles

833 words - 4 pages Gabriela Gonzalez Individual Assignment: from Financial Management: Principles and Applications Chapter 14 14-1-What are financial markets? What function do they perform? How would an economy be worse off without them? Financial market is gives opportunity to people to either trade or buy securities, like stock, bonds, and Purchases of home or insurance policy (Wikipedia, 2010). Is a market that assembles other people’s money to

Financial Management - 867 words

867 words - 4 pages STRENGTH AND WEAKNESS OF BGL Strength:- There is only one strength of Balochistan Glass Limited that current ratio is equal to bench mark.Balochistan glass is in the position to pay its current liability. Weakness:- Inventory turnover ratio:- BGL is holding too much inventory 586,522,000 and ratio is 1.997 but bench mark is 5.856 times. Day sales ratio:- First the collection department of BGL is not working well. Or Second

Related Papers

Financial Management Essay 878 Words

878 words - 4 pages Financial Management Challenges Londone Williams BUS 650 Managerial Finance Prof. Atkinson February 24, 2015 In order to understand the different challenges that financial managers are faced with in today’s society, it is imperative to understand the characteristics of the market structures and the influence of the market liquidity, competition and competence on financial

Financial Management Essay 2245 Words

2245 words - 9 pages National Institute of Business Management Chennai - 020 FIRST SEMESTER EMBA/ MBA Subject : Financial Management Attend any 4 questions. Each question carries 25 marks (Each answer should be of minimum 2 pages / of 300 words) 1. What are the significant factors of Financial Statements? Discuss the various tools of financial Analysis. Answer: Profitability and Financial soundness are the two significant

Financial Management Essay 1625 Words

1625 words - 7 pages Examination Paper of Financial Management IIBM Institute of Business Management Examination Paper Financial Management Subject Code-B-103 Section A: Objective Type & Short Questions (30 marks)    This section consists of multiple choice & Short Notes. Answer all the questions. Part One carries 1 mark each & Part two carries 5 marks each. MM.100 Part one: Multiple choices: 1. The approach focused mainly on the financial problems of corporate

Financial Management Essay 1273 Words

1273 words - 6 pages Finance 3101: Key Questions Chapter 1 1. What does Financial Management involve? 2. What is the “Cycle of Money”? 3. How do lenders and borrowers benefit from financial intermediaries? 4. What are the four major areas of Finance? 5. What are the four types of markets for financial assets? 6. What are three ways of classifying financial markets? 7. What are the three main questions financial managers must answer