The Finance

Standards guide

My entity’s guideline to
becoming 100% financially
sustainable & legal
 Evolved finance
standards
Hey there,
The moment has finally come: we have evolved
the finance standards. Hard work and dreams of
four generations of financiers have come together
in these Finance Standards, ensuring that we
become a 100% financially sustainable and legal
AIESEC. Now it is up to us to carry on the hard
work and implement the Finance Standards 100%.
From the GFB Survey of August onwards these
items will be tracked.
Please make sure you go through this file
thoroughly, already mapping out where your entity
still has work to do. You can find the new/evolved
Finance Standards checklist items by looking for
items with a yellow star next to them.
If you have any questions, feel free to reach out to
me at rolandg@ai.aiesec.org.
With love,
Roland, AI Finance Manager 18.19
 but why?
“To Ensure we (AIESEC) are 100%
legal and sustainable in our
operations at all levels.”
Concretely to:

● Align quality among different realities

● Easier education and collecting data
● Ensure legality, protect organization and
customer
● Consolidate data
● Set expectations, ensure that minimum of
operations is happening
● Ensure financial and legal sustainability of our
organization
 We need standards to align quality amount different
realities and to enable a sustainable growth.

There are

Legality Accounting Reporting

6 Finance Standards
Fortunately most of them are an easy guess based
on its name. Nevertheless, over the next few
pages we’re gonna explain what is each one of
them and what does it mean for your as de CFO of
your entity.

If you read all of them carefully you will:

● Make your decisions more informed from a
Budgeting Auditing Sustainability legal and sustainable point of view.
● Let’s just say you will be able to call yourself
a CFO ;)
 ec a p! But why are Finance Standards
R
so important? Auditing

Auditing

Auditing
The dashed line
represent your Sustainability
Budgeting annual audits.
Accounting The green line is
Legality sustainability, not a
Reporting Budgeting one year period
The whole first part Budgeting thing.
is Legality. You can’t Only if Budgeting, Accounting
do much unless you Accounting, Reporting Accounting So yes, you can say
are legal. is well done, will we Reporting that your job
Reporting
manage our financial transcends your
one-year term.
info properly and take
#ProudFinancer
better decisions

Year 1 Year 2 Year 3 Year 4

 Legality Let’s be
What does it mean to be legal?
honest
If demonstrating integrity is one

1 Operating and behaving according to the national law

-Using the right work permits for foreign MC and GT interns, reporting to
fiscal authorities, signing contracts for our exchange partners and our EPs.
of AIESEC Values, are we
supposed to even need this
slide? Unfortunately WE DO as
being legal is still an issue in lots

2 Operating and behaving according to the Global of entities.

Compendium
-Fulfilling global membership criteria, having democratic elections for MC. Being legal means
demonstrating integrity in

3
everything we do, complying
Establishing internal governance and following it with the national law and with
-Having a national compendium, having LCP and EB elections in the LCs. organizational guidelines and
rules, and protecting the

4 Ensuring we have external legal advice to protect our

entities and the brand
-By having a probono lawyer, inhouse lawyer or a lawyer in the BoA.
organizational brand and the
integrity of the entity.

Why
A legal organization ensures its brand name
& reputation - AIESEC as a similar
organization needs to ensure legal profile as
well.
Considering the products and the issues we
cater we cannot take risks of sending our
Exchange participants illegally.
Compendium and constitution
Legal representative inside the MC
Global membership criteria
Entity membership criteria (for LCs)
Legal registration for MC and LCs
Tax status is defined and paid
What does it help
you with?
Think about what needs to be covered
for external and also internal
environment to ensure basic legality
and governance integrity.
Trademark registration
Exchange contracts
PD and sponsorships contracts
Visa for customers
Visa for international MC members
Profesional legal advice
Risk & Legal matrix is fulfilled
The Legality checklist for MCVP F!
Compendium and constitution Legal representative inside the MC
Official document from competent authority which indicates
Every entity needs to have a compendium or
who has power to represent the legal entity.
constitution of the entity that fits the following
descriptions: For internal global membership criteria: there needs to be a
document signed by general assembly which confirms who
● It needs to fulfill conditions of external law
was elected as president for the association (in LC and MC)
● It needs to follow AIESEC Global
Compendium
● It needs to be approved by national plenary
It needs to include the following contents
Must do
(suggested structure): Read the compendium! Have a translated version in English
ready for global membership criteria and sit down with your
1. Subject and goals of AIESEC activities
MCP and go chapter by chapter to identify changes.
2. The election of MCP
3. Role of MC and LC definition Ensure that all legal representatives understand the
4. Way of managing with finance and legalities consequences of that role and have established
5. Entity membership criteria expectations on how to act and react on different
6. Define who would be accountable for scenarios.
Finance and legal affairs
Have clear who can sign what, what needs to go through
your MCP approval and what through you!
The Legality checklist for MCVP F!
Global Membership Criteria
It is based on the current version of Global Compendium which has the following requirements:

1. AI payments & no debts: Pay all fees that the entity has to pay including debts
2. State Of Global Association (SOGA): Fill in all quarterly surveys within the time frame
3. Internal Audit (IA) Survey: Complete the survey twice per year within the time frame
4. Confirm AI balance: Confirm the balance and send a signed scanned copy before the deadline
5. Global Finance Board survey (GFB): Fill in all monthly surveys within the time frame
6. IC & IPM Representative: Have an MCP representative at both IC and IPM legislations
7. Submit an unqualified external audit for the latest fiscal year
8. Have an independent bank account
9. Have a legal status registered as an entity
10. Have a compendium and Constitution translated in English
11. Have an external body (SG or BoA)
12. Have a VAT status or proof that entity is exempt to pay in English
13. Submit a trademark registration for classes 32, 36 and 41 of AIESEC name and logo
14. Have one legislative meeting per year where the Assembly needs to decide the process of selection or election of the MCP
15. Realize in average 2 EPs and 2 opportunities per LC
16. Not have more than 1 lost case with ICB per 1000 exchanges in period between membership checks.
17. Have an ECB in place
18. Regional membership criteria fulfilled
The Legality checklist for MCVP F!
Entity Membership Criteria (LCs)
Specify National membership criteria for local
committees in Compendium or Constitutions and
have at least one legislative meeting during the year
to review the fulfillment.
Legal Registration for Entity
Copy of official document which establishes AIESEC
in the country or territory.
Legal Registration for LCs
Copy of official document / agreement which establishes the LC
as a legal organization affiliated with the MC and/or university.
Tax Status is defined and paid
Registration with the tax office according to external
laws. All taxes paid as due.
Trademark Registration
All AIESEC logos registered in the country (e. g.
AIESEC, Youth Speak).
Must do
Get the previous Global Membership Criteria Folder
of your entity, download it and understand your
responsibilities as MCVP Finance during transition.
Understand the Entity Membership Criteria. Talk to
the Entity MSC and understand your responsibilities
as MCVP Finance during transition.
Make sure you have legal registration, tax status
defined and trademark registration. This is only your
responsibility. Make it a priority if you don’t have it.
The Legality checklist for MCVP F!
Exchange contracts
Contracts must be signed for GT OPs, GV OPs, GE OPs,
Must do
GT EPs, GV EPs, GE EPs. Contract must include: As silly as it sounds - READ the exchange
● Subject of contract contracts - you will be asked by a lot of
● Price people to sign them so know what you
● Details of the organization/EP commit and that they do!
● Dates Adjust if needed, check with lawyers or
● Signatures of both sides create them if you still don’t have one!
● Alignment with national/international/local
compendium

PD and sponsorship contracts

All sponsorships like in kind donations or YouthSpeak
sponsorships should be in a contract, stating everything
you do in exchange contract plus details of the partner.
The Legality checklist for MCVP F!
Visas for customers
Visas for EPs of all exchange products and Trainees must
Must do
be compliant with external law.
Coordinate checking the visas -you would be
For example: IGV interns should have a volunteering visa surprised how often immigration law
instead of a tourist visa in case the law of your country or changes!
territory requires it.
Have a lawyer phone number in your
Visas for international MC members cellphone, call him/her and introduce
All international MC members must have a valid visa if yourself. Hopefully you will never use it
the law doesn't say anything different. again, but in case you have a safe solution to
jump into!
For example: Your international MC members should have a
work visa .

Professional legal advice

Ensuring we have external legal advice to protect our
entities and the brand (e.g. by having a pro-bono lawyer
or law firm, in-house lawyer or a lawyer in the BoA).
The Legality checklist for MCVP F!
Risk & legal matrix is fulfilled

Insurance: Bank:
All EPs and Trainees with Insurance Independent Bank Account

War zone: Global fees:

Not operating in any armed conflict zone Regional and global fees are paid.

Domain: ECB:
We have webpage domain for at least 2 years if you have a There is an ECB in place.
national website

GDPR:
We follow GDPR Regulations as per GDPR dashboard
bit.ly/TheGDPRDashboard
 Accounting
The law
What is accounting? is the law
It is the process of collecting, recording, classifying,
1 interpreting and communicating financial information Even though we live in digital
age, the law is still the law.
Please bear in mind, that
It reveals profit or loss for a given period, and the value receipts and invoices for

2 and nature of an organization's assets, liabilities and

equity.
purchases and sales need to be
kept and the accounting records
should match these physical

3
receipts.
It shows overall wealth, profitability and liquidity (cash-
flow). Without ensuring all of that is in
place, you shouldn’t be happy

4 It shows the resources available, how those resources are

financed and the results achieved through using them.
with the current state of your
entity!
 What does it help
Why you with?
AIESEC as any other organization needs to Way and principles needed to be
do accounting to collect information about followed in accounting/bookkeeping
operations to be able to evaluate financial process.
status and performance for making decisions
and to fulfil criteria set by law.

Double entry bookkeeping system Requirements of accounting

documents = documents which
prove accounting transactions
Accounting principles
Archive all accounting
Alignment between accounting and documents physically and/or
budget virtually

Financial statements should be Align your chart of accounts

generated at least once per year with GFB list of accounts
The Accounting checklist for MCVP F!
Double entry bookkeeping system
Each legal entity which is obliged by law to do accounting
needs to have a proper bookkeeping system.
Align your chart of accounts with
GFB list of accounts
In order to provide data for GFB survey, your accounts
need to be aligned to the structure, which GFB provide.

Entities who needn't to do accounting by law, they

should do their own bookkeeping management and
storage all the accounting documents.
Double entry bookkeeping system is based on the fact
that every financial transaction has equal and opposite
effects in at least two different accounts. It is used to
satisfy the equation Assets = Liabilities + Equity, whereby
each entry is recorded so as to maintain the relationship.
Basically, you not only look at the bank statement which
is part of the assets, but you also look at who owns the
money. So, then you classify receivables and liabilities.
Must do
If you still don’t have one, get an accounting
system as soon as possible. Even if your don’t
have money you can use Wave (for free) of
Quickbooks (low fee).
If you have an accountant, talk to him/her as
soon as possible to align your chart of
accounts. It’s super simple and it will make a
difference!
The Accounting checklist for MCVP F!
Accounting principles
Accrual principle: Your transactions should be
recorded in the period in which they actually
occur, rather than the period in which the cash
flows related to them occur.
Consistency principle: Once an accounting
principle or method is adopted, continue to follow
it consistently in future accounting periods. Only
change an accounting principle or method if the
new version in some way improves reported
financial results.
Cost principle: It is also known as the historical cost
principle. The cost principle requires that assets be
recorded at the cash amount (or its equivalent) at
the time that an asset is acquired.
Economic entity principle: The transactions of a
business should be kept separate from those of its
owners and other businesses. This prevents
intermingling of assets and liabilities among
multiple entities, which can cause considerable
difficulties when the financial statements of a
fledgling business are first audited.
Full disclosure principle: You should include in an
entity's financial statements all information that
would affect a reader's understanding of those
statements.
Going concern principle: The assumption is that a
company or other entity will be able to continue
operating for a period of time that is sufficient to
carry out its commitments, obligations, objectives,
and so on.
The Accounting checklist for MCVP F!
Accounting principles (Part 2)
Must do
Monetary unit principle: Record only business Start recording your transactions! It’s easier
transactions that can be expressed in terms of a than you think. Approach GFB if you have any
currency. questions or concerns about any accounting
principle!
Reliability principle: You can record only transactions
in the accounting system that you can verify with
objective evidence (accounting document).

Revenue and costs recognition principle: The

accounting guideline requiring that revenues (costs)
be shown on the income statement in the period in
which they are earned (spent), not in the period when
the cash is collected.

Time period principle: You should report the financial

results of its activities over a standard time period,
which is usually monthly, quarterly, or annually.
The Accounting checklist for MCVP F!
Alignment between accounting Cashflow Statement should be
and budget generated at least once per year
The cashflow statement is a financial statement that
Costs & revenues in real budget needs to be equal costs
shows how changes in balance sheet accounts and
& revenues in accounting.
income affect cash and cash equivalents.

Requirements of accounting
Balance Sheet should be documents = documents which
generated at least once per year prove accounting transactions
The balance sheet reports the amount of Assets,
Liabilities and Equity at a specific point in time. ● The identification number of the vendor.
● The amount to be paid.
● The date on which payment should be made.
● The accounts to be charged to record the liability.
Income Statement should be
generated at least once per year
The income statement is a financial statement that
represents the revenues earned and expenses incurred.
 The Accounting checklist for MCVP F!
Archive all accounting documents
physically and/or virtually
Have these accounting documents according to national
law, but no less than 5 years:
A. Invoices created and received
B. Reimbursement forms and all receipts,
C. Bank statements,
D. Cashbook (petty cash)
E. List of transaction from the year,
F. Balance Sheet & Profit and Loss Statement

Must do
Establish clear rules to your LCs and to your MC Team
about reimbursements only with the corresponding
document. It will take some time for people to get
used to your rules, but it will be worth it!
 Reporting Let’s act
sustainably
What is reporting? We do reporting so our
stakeholders can easily

1
Is providing organized information in the form of a understand the financial position
document. and performance of AIESEC and
our products so we can make
data-driven decisions.

2
Financial reporting refers mainly to external financial
statements (balance sheet, income statement, Only if you make sure that all
statement of cash-flows). finances are reported and you
know the current state, you can
say that you “act sustainably”.

3 Other reports may be monthly, quarterly and annual

reports (performance and financial) to the national
plenary and AI.
Most of MC members will be
out in 365 days and the least
you can do for next team is
ensure they have proper
financial data to make informed
decisions!
 What does it help
Why you with?
Reporting is a tracking tool, which help us to How your reports and reporting
check the current financial status and process should look like.
performance of the entity, keep the
organisation accountable, ensure it is
operating legally, and be transparent with
how the organisation is using its resources.

Monthly reporting of executed

GFB Survey is submitted monthly.
budget for incomes and expenses.

Reporting Process of Budget Execution.

All reports include structure of GFB.

Storing the reports physically and/or

virtually.
The Reporting checklist for MCVP F!
Monthly Reporting of executed
Budget for incomes and expenses
Must do
If you don’t have them, create processes in
● LC VP F reports to LC EB monthly about the LC place and make sure LCs are aware of them!
financial situation
Set up the behavior for transparency!
● There is Monthly Reporting to MC on Budget
execution (for Incomes and Expenses) Ensure reporting each month to the MC on
Incomes and Expenses.

Reporting Process to plenary of

Budget Execution
● LC EB Reports to local Plenary every quarter
● MC Reports to national Plenary every quarter
● Entity Fills the GFB Survey (with LC and MC data)
● Please note: Missing out a single GFB monthly
submission will result into losing Global
Membership.
The Reporting checklist for MCVP F!
All reports includes structure of
GFB.
All the costs and revenues will be divided on internal and
external to ensure that we can consolidate data and
aligned to the consolidated chart of accounts based on
the GFB Survey.
Storing the reports physically
and/or virtually
All reports should be stored for at least 5 years
Must do
Make sure you prepare yourself on how to
prepare the report that meets AIESEC
International Financial Statements - so we
can have similar reports by entities in order
to unify them.
Make sure your MC, and your successors
know where you store the reports.
 Budgeting
A tool to
What is budgeting? assess your
performance
1
Is an action plan to achieve a set goal, expressed in
values and financial terms that has to be achieved in a
set time frame and under expected conditions. One thing is creating a budget,
other thing is to actually open
the file at least each month!

2 Is the numeric translation of our action plan. Keep in mind that budget should
not be an excel file which you
once legislated (or not). It should

3
Enables:
● Financial control of the organization.
● Tracking of the organization’s action plan.
● Preventive or corrective role in the organization.
be a tool to assess where are
you with performance and what
plan adjustments you need to
take into consideration in order
to run your entity.

Why
Budgeting makes sure we can sustainably
achieve our plans, and keeps us
accountable for it. Because without a
budget you are like a pilot in the dark.
All budgets are planned before the
terms start with monthly structure.
Exchange goals are translated into
budget as income targets.
Budgets are planned in profit.
Budget is approved by the board
before the terms starts.
Budget is updated at least once per
month.
What does it help
you with?
How your budget and budgeting
process should look like.
Forecasting of budget is done every
quarter (MCs) and every semester (LCs).
Every project with turnover above of 50% of the
LC budget or 20% of the MC budget needs to
have a separate budget and be controlled as such.
Prices in the entity are aligned
and reviewed every year.
Calculation of MC Affiliation
Fee is reviewed every year.
Customer flow is implemented.
The Budgeting checklist for MCVP F!
All budgets are planned before the terms
start with monthly structure.
Exchange goals are translated into budget
as income targets.
Underestimate your revenue, don’t take 100% rate of
fulfillment on them.
Budgets are planned in profit.
Planning for a loss is not sustainable for next
generations.
Budget is updated at least once per
month.
There is a monthly closing for the execution of Incomes and
Expenses.
Forecasting of budget is done every
quarter (MCs) and every semester (LCs).
This is to ensure that if incomes are not being met then the
expenses are also cut to ensure we don’t run into a loss

Budget is approved by the board before

term starts.
*Board are people responsible for the entity. For example:
LCPs, Board of Directors
The Budgeting checklist for MCVP F!
Every project with turnover above Calculation of MC Affiliation Fee is
of 50% of the LC budget or 20% of reviewed every year.
the MC budget needs to have a
In order to ensure that the financial model
separate budget and be controlled creates sustainable LCs and a sustainable MC.
as such.
Projects with such high turnover need to have a
seperate budget and be controlled seperately in Customer flow is implemented.
order to make sure the projects are sustainable.
For example: Conferences. EPs for all exchange products pay on Approved

Prices in the entity are aligned and

reviewed every year.
- To cover direct + indirect costs
- Based on GFB pricing tool
 Auditing
What is an audit? It’s about
transparency
1
Systematic examination and verification of an organization's books
of account, transaction records, other relevant documents, and
physical inspection of inventory by auditors.
No one likes to be controlled,

2
The organization's management (VP F and/or MCP) role: Prepares but if there is one good
the financial report. It must be prepared in accordance with legal cause it’s this one!
requirements and financial reporting standards.

3
Auditors role: A qualified independent
audit ensures we are
● Examine the organization's information, identify and assess
managing our financial
risks that can impact financial performance, and review
resources transparently as our
internal controls.
accounting matches our
● They make a judgement as to whether the financial report as
activities reasonably.
a whole presents a true and fair view of the financial results
and position of the organization and its cash flows, and is in
compliance with financial reporting standards.
● Auditors prepare an audit report stating their opinion.
 What does it help
Why you with?

Audit gives us an objective verification Criterias which external or internal

that our accounting gives fair and honest audit needs to fulfill.
view of our organization and that our
financial and legal process fulfill
standards and satisfaction in our
operation.

Unqualified external audit

Financial internal audit

Legal internal auditing

The Auditing checklist for MCVP F!
Unqualified external audit (for MC)
How often: Once per year, storage documents from audit
Must do
at least for 5 years. These activities take time. Make sure you’re
An external audit must be conducted every year to ensure actually including them in your planning and
proper financial management and minimize the potential put them in your calendar. If you need help,
for any risks to the AIESEC entity and AIESEC globally. A ask for it but don’t avoid auditing.
licensed external auditor must conduct the audit and the
auditor’s report must be unqualified. Audits are easier if in the start of the term
you make sure all receipts and invoices are
collected for every expense, don’t try to
Legal internal audit (for MC and LCs) collect them at the end of the period. For
Legal audit is the same, make sure your LCs
Once for MC and at least twice for LCs per year. have a clear framework on how to collect,
To make sure legal documents are implemented in all store and submit any document you might
products, such as contracts, and that these documents require for the legal audits.
are according to country and AIESEC's legislation.
Additionally, it must measure if all legal documents are
signed by the person who was the right to sign them in
the entity and also that these documents are being
stored. And ensure visas, insurances and etc is being
complied in our products.
The Auditing checklist for MCVP F!
Financial internal audit
(for MC and LCs)
Once for MC and at least twice for LCs per year.
Must do
The auditor ensure that financial statements are being These activities take time. Make sure you’re
accomplished in each program. The following financial actually including them in your planning and
principles must be measured: Accountability, Financial put them in your calendar. If you need help,
Reportability, Financial Model. ask for it but don’t avoid auditing.
Accountability and Financial Reportability must be Audits are easier if in the start of the term
measured for its existence, evaluation, accuracy and you make sure all receipts and invoices are
completeness. collected for every expense, don’t try to
Financial Model must be measured for its validity and collect them at the end of the period. For
implementation. These points should be evaluated: Legal audit is the same, make sure your LCs
● Pricing (considering in which stage of the have a clear framework on how to collect,
Customer Flow entity must be charging), store and submit any document you might
● Budget require for the legal audits.
● Financial Funds
● Incomes and costs for each product
● Sponsorships contracts
● Conferences, HR Costs
● Taxes & Reimbursements
 Sustainability Think in the
What is sustainability?
future
Sounds complicated! But all you

1
“Development that meets the needs of the present need to understand is that your
without compromising the ability of future generations to products do not generate loss,
meet their own needs” you have good reserves, your
– Bruntland Report for the World Commission on Environment and income comes from exchange as
Development (1992). a core product, and you utilize
your money in the best way.

2
“Sustainability is managing the triple bottom line - a
Simply put, sustainability is the
process by which companies manage their financial, social ability to maintain a product and
and environmental risks, obligations and opportunities. its benefits over time.
These three impacts are sometimes referred to as profits,
people and planet” Check out next page for
different levels so you know
– Financial Times.
what to do one by one!
 What does it help
Why you with?
To ensure sustainability of the organization Description how healthy and
while running healthy and effective products. sustainable products or entities look
like based on financial indicators.

MC Sustainability level 2 Ensuring pipeline & fulfilling Team

Exchange + LC fees revenues > 70% MC Standards
costs
LC Sustainability level 2 Liquidity
Exchange revenues > direct + indirect costs
Entity Sustainability level 2 Debt ratio
MC Sustainability Level 2 and LC Total liabilities/total assets
Sustainability Level 2
Product sustainability level 2 Direct costs / Total costs
Revenue of product>direct+ indirect costs

LC Core performance > 0.7 Months of Financial Reserves

(Exchange income/ total income)>0.7 (MoFR)
MC Core performance > 0.7
(Exchange income/ total income)>0.7 All conferences are sustainable

Education cycle for LCVPFs Risk Assessment and Management

 Other Financial
Entity Product
HR Sustainability Sustainability
Sustainability Sustainability
Indicators

The sustainability standard will be

Risk Management mapped out in these 5 ‘sub-standards’ in
Sustainability order to give you more information on
what part of sustainability your entity
needs to focus. Your entity will have a
percentage fulfillment per ’sub-standard’
and an overall Sustainability percentage
fulfillment.
 Entity
Sustainability

MC Sustainability level 2 Entity Sustainability level 2

Level 0: MC in loss
Level 1: Total revenues > Total costs
Level 2: Total exchange revenues + LC
fees > 70% costs
Level 0: Entity is in loss
Level 1: Consolidated the entity (MC+LC)
has a surplus
Level 2: MC Sustainability Level 2 and LC
Sustainability Level 2

LC Sustainability level 2
Level 0: Exchange costs not covered by
exchange revenues
Level 1: Exchange revenues > Exchange
costs
Level 2: Exchange revenues > total direct+
indirect costs
 Product
Sustainability

iGV sustainability level 2 oGT sustainability level 2

Revenue of product>direct+ indirect costs Revenue of product>direct+ indirect costs

oGV sustainability level 2 iGE sustainability level 2

Revenue of product>direct+ indirect costs Revenue of product>direct+ indirect costs

iGT sustainability level 2 oGE sustainability level 2

Revenue of product>direct+ indirect costs Revenue of product>direct+ indirect costs
HR Sustainability
Ensure Pipeline & Team Standards
● There is a MCVP Finance in the entity that does not
share other roles
● There are LCVP Finance that do not share other
roles
● There are Finance Managers in expansions
● All LCVPs Finance fulfill the team standards with
their teams.
● If MCVP Finance has a team (for instance NSTs),
then MCVP also fulfill team standards with them
Education cycles for LCVPs
● There is a Manual of Functions for LCVPs Finance.
● There is an education timeline for LCVPs Finance
(that includes Team Standards and Finance
Standards) performed in conferences and in virtual
channels.
● There is coaching for LCVPFs (either by MC Finance
or NSTs.
● There are visits or audits performed when needed
 Liquidity
Other Every quarter check your liquidity, the optimal values
Sustainability are mentioned below:
Indicators ● Cash (bank account + petty cash) / Short term
liabilities =>1
● Current assets/Current liabilities = between
1.5 and 3
Months of Financial Reserves (MoFR)
Evaluate your financial sustainability according Core Performance for LC and MCs
following formula:
● MoFR <=0 - Critical financial situation As exchange is our core product, we need to make
● 0 < MoFR < 3 - Dangerous situation sure that our main income derives from this.
● 3 < MoFR < 6 - High risk Exchange income should be more than 70% of total
● 6 = MoFR - Optimal situation income, for both LCs and MC separately.
● 6 < MoFR - Unnecessary reserves when it does
not have a purpose
Debt ratio
when: Months of Finance reserves = Current
equity/Average costs of 12 previous months. Total liabilities divided by total assets needs to be
under 0.5, as then most of the organization’s assets
are financed through equity rather than through debt.
 Other
Sustainability
Indicators

Direct costs / Total costs

In order to scale up our operations, we need to invest

our financial resources into this. Right now there is
not yet an ideal ratio for this, however the industry
benchmark is 65%.

All conferences are sustainable

● Your national and local conferences don't
generate a loss.
● Conferences revenues don't depend on sales
(unless their target is external).
● Have conference guidelines and reports for
knowledge management and transition.
Risk Management
Sustainability

Risk assessment and management

There is a Framework/tool where risks (integrity and
security, finance, legal, reputation, future operations)
are identified
● There is a matrix (Probability vs. impact)
● There are action steps (act, mitigate, avoid,
transfer, ignore)
● There is a log on risks that have occurred and
how they have been mitigated for future
reference.
The Sustainability checklist for MCVP F!

Must do
Start the conversations as soon as possible!

● AIESEC does 6 exchange products. There is

plenty of choice to make sure that majority
of your revenues comes from them (no less
than 70%).
● 6 months of financial reserves is ideal - less
is risky, more is waste. Where are you?
● Liquidity is a key! Assess it!
● Debt is not an option! Create a payment
plan to be out of internal/external/AI debt
ASAP.
● Make sure you know what are the risks
which you might face and create a
framework with the people responsible.