The financial plan
First, check that you understand your organization's financial, accounting and resourcing systems. You don't need to be an accountant, but you need to be able to work with your accountant and understand the information you get from him/her.
Second, don't do it alone. While you are preparing a budget, get other people to participate.
Write a financial plan to estimate cash flow projections, give budgetary information and define the implementation plans. (The trend is currently that the budget is the plan.) It must include financial accountability systems that meet your organization's best practice provisions. The financial plan must take account of:
- The strategic plan and objectives, and your forward planning priorities
- Everything involved in planning and implementing programs
- Achieving the planned program performance outcomes
- The current financial state of the organization
- A review of financial inputs required, sources and forms of finance
- Projections of likely financial results
- Forms of finance including working capital, fixed capital, debt and equity capital
- Client and stakeholder needs.
You need strategies to make sure you have enough resources, so do your planning to get maximum value from the organization's resources. You will have to stay within your budget allocations, your existing resources, your contingencies and your available resource providers. They should reflect an accruate interpretation of financial information and reports, especially compared them to budgets and contract obligations.
You'll need funding. Within these constraints, you'll need to research options to get funding and resources for operational needs, and make recommendations to your supervisor or board.
Then you'll need to write funding proposals. Develop and prepare requirements and contracts with funding bodies according to your organization's procedures. Then liaise with the funding bodies to monitor the submission's progress, and negotiate and revise as necessary.
You won't always have all the funding and resources you'd like. You'll need to negotiate changes to operational plans so they to fit the resources available. Develop contingency plans to accommodate possible shortfalls.
Ensure that budgets are submitted for approval on time and in a clear, standardized format. When it's approved, interpret and inform other staff.
More on finance | The money pages | About funding proposals
(Links open new windows)Tasks
Develop a budget and resourcing plan, resource proposals, and contingency plans. Your plan should normally include:
- any plans to raise funds (including the forms of financing)
- estimated cash flows
- income and expenditure statement
- budgetary information
- financial risk management
- a financial management system (e.g. periodic reviews of different kinds)
Later on, you'll need to manage the application of:
- managing finances, that is, making financial decisions.
- using computerized and/or manual accounting and bookkeeping systems
- budgeting
- planning investment
Questions
- What are your organization's procedures and practices for financial management?
- Go though your books and explain the principles and practices you use to make sure your resource management is effective.
- What are the main business ratios that you have to monitor?
- What taxation office requirements affect you?
- What awards and industrial agreement affect you?
- What insurance requirements are you obliged to have? What extra insurance cover have you considered? Why did you decide against it?
- What particular incorporation requirements affect your financial systems (e.g. ASIC compliance)?
- Explain how you put together a budget.
- Explain two different models and practices of financial management. What are the advantages and disadvantages of each?
- What financial auditing procedures and requirements affect you? What other quality assurance/continual improvement mechanisms do you use in financial management?
- How would you improve your financial management system?