Financial Management of

Projects

Pia Niittymki & Gil Faria

Overview of the
program
General
vocabulary
Legal issues
Budget
exercise
Treasury
Timeline
After the project

Background

What is a project
Something happening for a
limited time
Has a group who is responsible
for planning and realizing plans

Basic IFMSA project

vocabulary
mission
goal
objective
project proposal & final report
fundraising
budget

Inside the team

Estimate the number needed
divide the tasks
keep them informed

OC/Staf
Partnership with externals

Think like a funder

what is the purpose of your
organisation, will you make
them look good
are you professional
can you handle the money
properly

How to prepare
make sure you have the right to
use your organisations name
make sure your partners have
done the same and that you
have a clear contract with them
make sure other people in your
organisation know and accept
what you are doing

money, money,
money

Financial
Management of
Projects
No major project is ever completed in
time,
within budget and with the same
people that
started it. Yours will not be the first.

Project Criteria
Absolute criteria
is your project worth it at all?
will it achieve something that will
justify the energy, money and time
spent
Relative criteria
is it worth it this much?
is it a better way to achieve set
goals, are the costs justifiable

Defining the need for

funds
Define your objectives as clear as
possible, using simple,
understandable terms
Key questions:

is
is
is
is
is

it
it
it
it
it

rational
valid
relevant
self-sustainable
applicable

Financial
management of
projects
Budget
&
Cash Flow

Budget
A budget is a plan for the
expected income and
expenses, over a period of
time.
Your budget must inspire
confidence and show your
project to be both realistic and
trustworthy.

Budget
The longer the planning period,
the more inaccurate the forecast.
Forecasting of large inter-related
items is more accurate than
forecasting a specific itemized
amount.
When a large group of items are forecast
together, errors within the group tend to cancel
out.

The budget
Must be able to be revised
quickly and easily.
An easy to use computer spreadsheet
(Microsoft Excel ) is more than
enough to all you possible needs.

Budgeting must be linked to

strategic planning since
strategic decisions usually
have financial implications

Some tips about

budgeting

Be pessimistic in project costs and

incomes. Usually use lower incomes /
higher costs than you think.
Dont inflate your budget, because
potential sponsors
are not stupid and will notice this
easily !!!
Do not overshoot the expenses.
Identify goods and services that you
could raise rather than cash

Some tips about

budgeting
The income is often uncertain
when you start a project, but the
expenses can often be
calculated in detail .
Try to find out the real costs
rather than estimating them
Make a minimum-maximum
budget for your project.
Remember to add 10%
unexpected costs to the budget

How to do a budget ?
Round up/down your figures.
Try to be as exactly as possible.
Ask someone to review your
numbers.
Try to think of everything
All expenses you may have
All possible funders

Make sure it has no profit

or debt.

How to do a budget?
Explain how you reached your total figure
(include sub-total, unity costs, etc)
Make sure the expenditures correspond
to the project planning and activities.
Include all sources of funding
(participants fees, your organization
investment, grants, etc)
Goods and services provided for free,
should be listed both in expenditures and
incomes.

Budget
What a budget looks like

Exercise
You are planning to organize a
NMO meeting in 6 months time.
Make a budget as accurate as
possible
Sporting events to include:
Grants
Remember
Social program
Publicity
Scientific programme
Lodging and food

Participation fees
Whatever you may think of

Financial Administration
Treasurer fundraiser
Task of the treasurer responsible for all
the incomes and expenses of the
project.
Especially important in larger projects.
Make sure that all the original receipts
are stored in an organized way.
Keep an account of all expenditure and
income.
Necessity of auditing???

Who can be the

treasurer?
almost anyone
Organized and responsible.
Your organization treasurer, or
Your own project treasurer
Be sure to have only one person
dealing with money (half the
work, half the responsibility)

Which bank account to

use ?
If possible, have your own bank account
only for the project.
If you cant have a new account then
keep to the old one, but remember

Your organization treasurer should make the

movements,
You should have your own treasurer to keep
track of transactions, budgeting and money
flow, as well as to deal with you
organization treasurer

If your organization treasurer is in

charge of the project money, you can
use the same old account.

How to keep account ?

Register every cash flow of your
project.
You can use your own method, given
that:
Its accurate,
Its sensitive,
Its standardized.

Usually columns with debts / credits

Multiple accounts at the same time
(bank, cash, etc)

Keeping account
Example of cash flow

Exercise
You are finally organizing, the NMO
meeting, try to make a realistic cash flow
sheet.

Now, you have received a grant, specifically for

the scientific component of the event how will
you record it?
Imagine now, that instead of being to the
scientific component, it would be half for that and
half for sporting events how would you do it
now??

Timeline

After the happening

evaluation period
audit
final report

Evaluation
did you reach what you wanted
feedback from participants
impressions from staf+OC

evaluation forms
clear questions
free feedback

Audit
professional/non-professional
treasury
accounting
audit

investment or a waste of
money?
money left over

Final report
what you did and
how
information from evaluation
send it to the people you cooperated with
information for future
generations