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Financial Mgmt Training Notes

Financial Mgmt Training Notes

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Published by Khan Mohammad
This Is My Financial Management Training Notes
This Is My Financial Management Training Notes

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Published by: Khan Mohammad on Oct 31, 2010
Copyright:Attribution Non-commercial

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10/31/2010

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FinancialManagement
2004
 
This publication was made possible through the support by the U.S. Agency for International Development,under the terms of Award No. GEG-A-00-01-00005-00. The opinions expressed herein are those of the author(s)and do not necessarily reflect the views of the U.S. Agency for International Development
 
Financial Management Course Notes
Course Content:
 
General Financial Management
 
Financial Accountability
 
Asset Control
Definitions
:What is Financial Management?
 
The management and recording of the flow of money.
 
Planning the future use of money
 
Ensuring that the money is well spent and not misused
 
Is essential to building financial sustainabilityWhat is Financial Accountability?
 
Producing regular financial reports for those with
an interest
and a
right
to know
 
Proving that the leadership has control over the financial decisions of the organisation
 
Accounting for funds by producing documentary proof of receipts and payments
FINANCIAL MANAGEMENT
MANAGEMENT AND RECORDING OF THE FLOW OF MONEY
 
The development sector is becoming increasing competitive – there is constant changewithin and outside the sector.
 
Like in the corporate world, management of organisations in the development sector must therefore respond to the needs/requirements of the donor community.
 
It is expected of organisations to demonstrate that they have implemented soundfinancial policies and disciplines.
 
By implication we mean “the management of financial systems” within an organisation
.
INPUTS OUTPUTS(Income) (Planning/Budgeting) (Expenditure)PRINCIPLES:Control Monitoring Recording
1.
 
Definition
: FINANCE IS THE APPLICATION OF A SERIES OF ECONOMIC PRINCIPLESTO MAXIMISE THE WEALTH OR OVERALL VALUE OF AN ORGANISATION.2.
 
Process indicates that activities need to be co-ordinated to achieve a desired result.3.
 
Process also refers to systems – in this instance, financial systems – with its
inputs
,
processes
 and
outputs
.4.
 
All financial processes/systems should be clear and accessible5.
 
For control to be implemented it is necessary:
 
To realise that there is a difference between what is required and what is happening
 
To have the means to act on that information so that the input to the system is altered inthe right way.
PROCESS
 
6.
 
Accounting systems are systems with control – outputs are monitored and used to change inputso that the system will achieve its goals.7.
 
Financial transactions need to be recorded somewhere – either on paper, electronically or both.8.
 
Both income and expenditure should go through the process of controlling, monitoring andrecording.9.
 
This is a continuous process and should be applied to every transaction.10.
 
Being in the development sector we do not wish to think of organisations making “profits”(maximising profits) but rather substitute ”profit” with “surplus”.
BASIC ACCOUNTING SYSTEM REQUIREMENTS
 
Records all income of the organisation
 
Records all expenditure of organisation
 
Provides a detailed analysis of transactions
 
Provides history of transactions
 
Allows for production of accurate reports (information)1.
 
Different types of information systems exist in organisations:
 
Executive system (EIS) (support senior management)
 
Management information systems (MIS) (information to support all levels of management)
 
Expert systems (ES) (designed to solve narrow range of problems – need expertise in particular area, e.g. credit scoring systems)
 
Transaction Processing systems2.
 
In organisations a wide range of systems are operative – both formally (as above) andinformally.3.
 
The aim of systems is to ensure that there is order in their activity and that the activities of theorganisation are not chaotic.4.
 
Systems also help to ensure steady progress towards defined goals.5.
 
Organisations need to measure their performance – we therefore need to understand therelationship between the resources (money in this instance) and the demand for our work (services).6.
 
We are looking specifically at the transactions processing systems (TPS)
DECIDING ON A SYSTEM
 
Know the organisation’s needs?
 
Know donor requirements?
 
Know purchasing costs?
 
Know maintenance / support costs?
 
Finance personnel skills?
 
System requirements?
 
Upgrade current hardware & software?

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