Financial Management: Objectives and Planning

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

Importance of Financial Management

• Aids organizations in financial planning and acquiring funds to meet their financial objectives.
• Facilitates the effective utilization and allocation of funds.
• Supports critical financial decision-making processes.
• Enhances organizational profitability and overall value.
• Contributes to economic stability.
• Encourages personal financial planning through employee savings.

Role of the Sports Organization Treasurer or Accountant

• The treasurer manages financial supervision and performance, with responsibilities including:
• Preparing the annual budget detailing potential income and expenditure sources.
• Maintaining current records of all income and expenditure.
• Overseeing the club's cash flow, including issuing receipts, depositing money, and approving payments.
• Preparing and distributing invoices for services.
• Producing financial reports at committee meetings to support strategic planning.
• Submitting tax returns and employee income tax payments.
• Managing employee payrolls.
• Delivering financial activity reports to the membership at the AGM.
• Acting as a bank account signatory.
• Staying informed about the club's financial state.
• Preparing financial accounts for auditing and providing necessary information to the auditor.
• Acquitting government grant funds and submitting required financial statements.
• Preparing financial statements for the annual report.
• Collaborating with the secretary to maintain accurate membership payment records.

Basic Accounting Definitions

• Accounting: Tracking and recording financial activity to assess financial health and meet tax obligations.
• Accounting Period: Length of time covered by a financial statement (fiscal year, calendar year, quarter).
• Accounts Payable (AP): Tracks money owed to creditors, like loans and unpaid bills.
• Accounts Receivable (AR): Tracks money owed to a business by debtors.
• Assets: Items of value or resources a business owns, resulting from past activities and expected to generate future economic value.
• Balance Sheet: Financial statement detailing a business's assets, liabilities, and equity.
• Capital: Any asset or resource a business uses to generate revenue.
• Cash Flow (CF): The balance of cash moving into and out of a company during a period.
• 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: Processes for recording and analyzing employee compensation.
• Net Profit: Money left after subtracting taxes and costs of goods sold from total revenue.
• Income Statement: Financial document showing total revenues minus expenses over a period.
• General Ledger: Master account holding all ledger accounts and transaction records.
• Dividends: Portions of company profits paid to investors.

Budgeting in Sports Organizations

• Budgeting: Estimating revenue and expenses over a future period.
• Budget: Spending plan considering estimated income and expenses, usually for a year.

Importance/Reasons for Creating Budgets

• Ensures Resource Availability: Ensures enough resources to meet organizational goals by planning finances in advance.
• Helps Set and Report on Internal Goals: Determines revenue needed to reach company goals.
• Helps Prioritize Projects: Requires prioritizing projects based on ROI and alignment with company values.
• Leads to Financing Opportunities: Budgetary information is important for potential investors.
• Provides a Pivotable Plan: A financial roadmap showing how much should be earned and spent.

Guidelines when Preparing Budgets

• Determine organizational goals.
• Define income sources for the budget period.
• Define fixed and variable expenses, such as salaries and debts, but also noting that fixed expenses remain constant and that variable expenses change over time.
• Determine budget surplus and deficits to assess if projected income covers expenses.

Accounting Principles Applied to the Creation of Budgets and Financial Statements

• Accounting principles are rules and guidelines for reporting financial data.
• Key principles include:
  • Accrual, Conservatism, Consistency, Cost, Economic Entity, Full Disclosure, Going Concern, Matching, Materiality, Monetary Unit, Reliability, Revenue Recognition, and Time Period principles.

Principles Associated with the Financing of Sports Organizations

• Investing in sports can help brands connect with a wide audience and create a positive image, but it also raises ethical questions, especially about its impact on children.
• When receiving funding, sports programs should do the following:
  • Ensure transparency in funding.
  • Use established principles to show accountability.
  • Align values with sportsmanship.
  • Embrace ethical considerations.
  • Prioritize public health and safety.

Explore financial management: planning, organizing, and controlling finances to meet goals. Learn about its importance in financial planning, fund allocation, and economic stability. Discover the treasurer's role in budgeting and financial oversight.