Tips and Tools for Great Financial Management (handout 1 of 1)

704 views

Published on

Diana L. Sullivan, CPA, CGMA, Controller, Capitol Area Council, Boy Scouts of America

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

Tips and Tools for Great Financial Management (handout 1 of 1)

  1. 1. 9/13/2012 Tips & Tools for Great Financial Management Diana L. Sullivan, CPA, CGMA By PresenterMedia.com Agenda …and plan of attack! 1 Assess Identify & prioritize needed improvements 2 People & Critical Resources 3 Policies, Policies Procedures & Problem Busters 4 Routines that Work - Finance Calendar Time Management Toolkit 5 Effective Budgeting 6 Powerful Reporting Assess Identify & Prioritize Needed ImprovementsRank critical areas to improve.Reassess after going throughthe presentation. Accounting Function Financial PositionAsk stakeholders to assess. Best Practices? What’s our improvementFoster an atmosphere of g Oversight? focus?transparency and willingnesst d illi Internal Control?to hear honest feedback. Leadership Planning Board consensus Effective budgeting Great reporting Contingencies covered Focus on plan 1
  2. 2. 9/13/2012 People & Critical Resources Essentials for Financial Success• Accounting & • Leadership for fiscal • Outside finance staff stewardship Relationships• Integrity • Board commitment • Auditor• Training • Reporting / • Banker• Skills responding • Payroll processor• Judgment • Focus on mission • Insurance broker• Diligence • Transparency • Others Policies, Procedures & Problem Busters Conflict of Interest • Critical Policies Whistleblower • All NPTs need these key policies • Annual adoption & follow seriously Peer Groups • Critical Procedures Internal Controls • Key tasks kept up every single month Document Retention • Problem Busters • Use internal Controls to avoid big trouble • Make month-end checklists • Outsource payroll processing, if needed The Financial Orbit A Feedback LoopThe Budget is an earning and Plan andspending plan to implement Budgetyour strategic plan.Great reports helpmanagement make decisions.Just like a detective follows theevidence,evidence managers followthe financial evidence. Financial CycleYou are responsible to reportto outside parties. Youraudited financial statements, Audit, 990, Record,annual reports, and form 990 Report, Annualare available to the Reports Correctcommunity, and stakeholders“follow the money” and makejudgments about yournonprofit’s effectiveness. 2
  3. 3. 9/13/2012Finance CalendarWhen Critical TasksWeekly Payment of obligations Inspection of payroll, payablesMonthly Month-end close Bank reconciliations Account reconciliations Variance analysis Monitor Receivables M it R i blBoard Meetings (Monthly) Board reports, variance reportsMid-Year Begin budget building Engage AuditorFall Finalize & adopt budget Adopt policies & procedures as neededYear-End Year-end close, audit prep, tax returns, annual reportsAnnually Strategic planningTime Management Toolkit Deal with the Enemy: Interruptions Honestdiscussion management & employees Arrange quiet times Music Closed door Work from home Sign “Do Not Disturb” on phone Stay out of email, voice mail for periods of timeTime Management Tools BATCH the work Everything every day vs. batches Some items have to be daily Some items to batch Payroll Payables Journal Entries Phone Calls Folders for Colleague Meetings Difference between “batched” and “behind!” 3
  4. 4. 9/13/2012Time Management Tools Delegate – Learn to Train and Trust Work with people’s strengths Use non-accounting staff for some items – might even g improve controls! Find error-killer proofreadersTime Management Tools Checklists, Notes, and Cheat Sheets Month-end close checklists Manager’s “audit workpapers” Templates for often-used jobs J Journall entries with account names ti ith t & codes but amounts blank Budget templates Alwayslook for “self-checking” mechanisms What We Did Last YearLearn to Say NO Everything in life has an opportunity cost! Be deliberate about your time “Materiality” - good enough, not perfect How to escape a phone call How to escape a meeting Fight reverse delegation Look for great outsourcing opportunities 4
  5. 5. 9/13/2012Time Management Toolkit Time-Saving Features In GL Software Recurring journal entries Automatic journal reversals Saving report templates Import and Export Report GroupsTime Management Toolkit Become “Bit Literate” Clear emails daily Use two monitors Bit Literate “To Do” list Outlook tools Solve Puzzles Explain problem to someone else Revisit daily Let subconscious workWhy is Budgeting so Powerful? Financial Success is Tied to Effective Budgeting Buildsconsensus Reconciles conflicting priorities Big picture activity Measures performance objectively Creates structure for a rational feedback system 5
  6. 6. 9/13/2012 Effective Budgeting A Power ToolThink of budgeting as part ofthe planning process, just likethe strategic plan. Tyingbudget to strategic plan alsohelps “sell” it to yourstakeholders.Involve all necessary Build Measureindividuals in creating the Strategic Budget Actualbudget (also helps you “sell” Plan with vs.budget discipline). Team BudgetMeasure actual results againstbudget every month.Revise the budget if necessary.Hold people accountable fortheir budgetary performance. Create Key Measures Start by Making a Wish• If you could improve your nonprofit financially, what are the big three items you’d g change? • * Cash Position • * Collection of pledges • * Fund Balance • * Inventory Turn • * Membership • * Service volume Internal Reporting Leaders Decide Based on Financial Facts • Monthly Financial Reports • Statement of Operations, Financial Position, Changes in Net Assets and Cash Flows • Accountability • Report to each manager • about his responsibility centers •Key Measurements 1. * Your nonprofit’s most important financial priorities 2. * Measures of non-financial effectiveness 6
  7. 7. 9/13/2012 Internal ReportingLeaders decide based on financial facts.FINANCIAL STATEMENTS KEY MEASURES• Statement of Operations • Key measures are different for• Statement of Financial each non-profit. Position • What critical areas do you• Statement of Changes in Net need to improve? Assets• Statement of Cash Flows TIP: Post financial statements so managers can see their results monthly. Reporting Reports for Management and the Board Revenues Charts and graphs are powerful reporting tools. Fundraising Grants Supply Sales Miscellaneous Use charts and graphs for your Key Measures – make sure every piece of your board presentation adds meaning. 58% 23% 9% 10% Focus on Cash Position Cash $ 16,564 Short Term Investments 35,206 Total C h C h E i l t T t l Cash & Cash Equivalents $ 51 770 51,770 Less Accounts & Notes Payable (25,799) Less Payroll Taxes Withheld (1,040) Less Credit Accessed (16,603) Actual Net Cash Position $ 8,327 7
  8. 8. 9/13/2012 Bar Chart to Show Variances How are we doing compared to budget? Expenses Actual Budget $10,213 $10,500 $2,212 $2,150 $8,410 $8,700 $1,680 $1,450 Focus on Capital Expenditures PROJECT BUDGET ACTUAL VARIANCEBRIDGE REPAIRS $ 13,000 $ 12,839 $ 161FENCING 8,150 9,127 -977PARKING LOT 3,530 5,350 -1820SOD/IRRIGATION 2,750 1,912 838LIGHTING 3,200 1,565 1,635TOTAL 30,630 30,793 -163 Where to Get Help Greenlights Austin Chapter, Texas Society of CPAs A ti Nonprofit Financial Leaders Austin N fit Fi i lL d Group SCORE Texas Workforce Commission 8

×