Financial Management: An Overview

• Financial Management involves strategically planning and managing finances to align financial status with goals.
• It includes planning, organizing, directing, and controlling financial activities within an organization.
• Financial Management deals with profitability, expenses, cash flow, and credit management.

Importance of Financial Management

• Financial management is the foundation of any successful sports program.
• It aids in financial planning for organizations.
• It assists in the planning and acquisition of necessary funds.
• It helps in effectively utilizing and allocating acquired funds.
• It assists in making critical financial decisions.
• It improves organizational profitability.
• It increases the overall value of organizations.
• It provides economic stability.
• It encourages employee savings and personal financial planning.

Role of the Sports Organization Treasurer or Accountant

• The treasurer or accountant is responsible for the financial supervision and performance of the club.
• The treasurer manages financial obligations, including budget preparation, account management, and financial reporting.
• Responsibilities include coordinating budget preparation for committee approval
• Maintaining up-to-date records of all income and expenditure
• Issuing receipts, depositing monies, and approving payments
• Preparing and distributing invoices for services.
• Providing financial reports at committee meetings.
• Submitting tax returns and income tax payments for any paid employees as required.
• Managing employee payrolls if required.
• Reporting on financial activities to the membership at the AGM.
• Acting as a signatory on bank and investment accounts.
• Being informed about the financial position of the club.
• Preparing financial accounts for auditing.
• Acquitting funds from government grants.
• Preparing financial statements for the annual report.
• Working with the secretary to record membership payments accurately.

Basic Accounting Definitions

• Accounting: Tracking and recording financial activity to assess financial health, performance, and tax obligations.
• Accounting Period: The duration covered by a financial statement, such as fiscal years, calendar years, or calendar quarters.
• Accounts Payable (AP): Tracking money owed to creditors, including bank loans, unpaid bills, and credit debts.
• Accounts Receivable (AR): Tracking money owed to a business by its debtors.
• Assets: Items of value owned or controlled by a business that generate future economic value from past business activities.
• Balance Sheet: A financial statement specifying a business's assets, liabilities, and owners' equity.
• Capital (CAP): Assets or resources used by a business to generate revenue.
• Cash Flow (CF): The balance of cash moving into and out of a company during an accounting period, tracked on the cash flow statement.
• Credit: Accounting entries that increase liabilities or decrease assets.
• Debit: Accounting entries that increase assets or decrease liabilities.
• Revenue (REV): Income earned from selling products or services.
• Payroll: Operations for recording, administrating, and analyzing employee compensation.
• Net Profit: Money left after subtracting the cost of taxes and goods sold from total revenues.
• Income Statement: A financial document specifying total revenues earned and expenses incurred during an accounting period.
• General Ledger (GL or G/L): Master account containing all ledger accounts, with a complete transaction record for an accounting period.
• Dividends: Portions of company profits paid to investors.

Budgeting in Sports Organizations

• Budgeting: Estimating revenue and expenses over a specified future period.
• A budget is a spending plan that considers estimated income and expenses for a future time, usually a year.

Importance/Reasons for Creating Budgets

• Budgeting ensures resource availability to meet organizational goals.
• It helps set and report on internal goals by determining needed revenue.
• It helps prioritize projects based on potential ROI and alignment with company values.
• It leads to financing opportunities by providing documented financial performance for investors.
• Budget is a financial roadmap for the upcoming time period.

Guidelines when Preparing Budgets

• Determine the organization's goals.
• Define income from all sources for the budget period.
• Accurately define fixed and variable expenses.
  • Fixed expenses remain constant over time.
  • Variable expenses vary depending on several factors.
• Determine budget surpluses and deficits.

Accounting Principles Applied to the Creation of Budgets and Financial Statements

• Accounting principles are standardized rules that companies must follow for financial reporting.
• Key principles include: Accrual, Conservatism, Consistency, Cost, Economic entity, Full disclosure, and Going concern.
• Further principles: Matching, Materiality, Monetary unit, Reliability, Revenue recognition, and Time period.

Principles Associated with the Financing of Sports Organizations

• Sports financing and sponsorship enables companies to achieve marketing goals and promotional strategies.
• It enables companies to connect with their target audience.
• Campaigns must consider their impact on children, balancing commercial interests with societal well-being.
• Financing process must be transparent.
• Established principles should be used to show accountability.
• Values should be aligned with sportsmanship initiatives.
• Ethical considerations should be embraced when accepting or searching for financing.
• Public health and safety should be a priority when accepting financing.

Financial management strategically aligns finances with goals through planning, organizing, and controlling financial activities. It is essential for financial planning, fund acquisition, and effective resource allocation. It enhances profitability, organizational value, and economic stability in organizations.