LESSON-3.-TOOLS-OF-FINANCIAL-MANAGEMENT.pdf

THE TOOLS OF FINANCIAL MANAGEMENT There are tools under the four functions of financial management. That may help to achieve good practice in financial management. PLANNING TOOLS  These are the tools in planning the future of the management. Planning is also the basic process...

THE TOOLS OF FINANCIAL MANAGEMENT There are tools under the four functions of financial management. That may help to achieve good practice in financial management. PLANNING TOOLS  These are the tools in planning the future of the management. Planning is also the basic process of management given that it’s the function that lets the organization project the decisions to make. STRATEGIC PLAN AND ITS ELEMENTS Process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives. The process includes establishing the sequence in which those goals should be realized so that the organization can reach its stated vision. BUSINESS PLAN ACTIVITY PLAN AND WORK PLANS  MEMBERSHIP ADMINISTRATION  Act as first point of contact for membership enquiries. Deliver in accordance with agreed customer care guidelines a high-quality, membership- related advice and administrative service to our members, applicants and customers  CASH FLOW FORECAST AND BUDGETS  Cash flow forecasting involves estimating your future sales and expenses.  Budgetary planning is the process of constructing a budget and then utilizing it to control the operations of a business. The purpose of budgetary planning is to mitigate the risk that an organization's financial results will be worse than expected. RETURN ON INVESTMENT (ROI)  the profit you make as a result of your investments. ROI is generally defined as the ratio of net profit over the total cost of the investment. ROI is most useful to your business goals when it refers to something concrete and measurable, to identify your investment's gains and financial returns.  the term used for the net investment is “net NET SURPLUS surplus” it is one of the unique accounting characteristics/standards for cooperatives. manages and records the day-to-day financial transactions of an organization, including fixed asset management, expense management, revenue management, accounts receivable, accounts payable, subledger accounting, and reporting and analytics.  FEASIBILITY STUDY is an assessment of the practicality of a proposed plan or project. A feasibility study analyzes the viability of a project to determine whether the project or venture is likely to succeed. Organising of resources ; staff, volunteers, vehicles, property and money. To ensure the implementation of the overall plan.  ORGANIZATION CHARTS AND FLOW DIAGRAM  An organizational chart is a visual chart that represents the structure of a company.  A flowchart is a picture of the separate steps of a process in sequential order. It is a generic tool that can be adapted for a wide variety of purposes, and can be used to describe various processes, such as a manufacturing process, an administrative or service process, or a project plan. A job description is a useful, plain- language tool that explains the tasks, duties, function and responsibilities of a position. It details who performs a specific type of work, how that work is to be completed, and the frequency and the purpose of the work as it relates to the organization's mission and goals.  CHART OF ACCOUNTS  A typical chart of accounts has five primary accounts: Assets. Liabilities. Equity. Expenses. Revenue.  FINANCE MANUAL  The revised Financial Manual sets forth the accounting policies, procedures, classification of costs, receipt of funds, budget and budgetary control system, reporting procedure, financial authority, documentation system, fund management, payment procedure, chart of accounts, etc. CONTROLLING TOOLS A system of controls, checks and balances are essential to ensure proper application procedures and resources.  DELEGATED AUTHORITY  The delegation of authority refers to the division of labor and decision-making responsibility to an individual that reports to a leader or manager. It is the organizational process of a manager dividing their own work among all their people. PROCUREMENT PROCEDURE  The procurement process means the workflow or process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process. Procurement processes generally involve making buying decisions under conditions of scarcity. RECONCILLIATION  Reconciliation is the process of comparing transactions and activity to supporting documentation. Further, reconciliation involves resolving any discrepancies that may have been discovered.  Internal audits focus on measuring current performance and finding areas for improvement.  External audits focus on proving the accuracy and veracity of financial statements.  Typical information captured on a fixed asset register includes a unique identifier code, asset name, description, purchase and capitalisation dates, purchase cost, department, cost centre, residual value and asset life and depreciation rule.  A company vehicle policy, also known as a company vehicle use agreement, determines which employees are eligible for a company fleet vehicle. It also includes requirements for qualifying for a company vehicle, basic rules employees need to comply with when using company vehicles, and disciplinary action for misusing vehicles.  Insurance is a legal agreement between two parties – the insurer and the insured, also known as insurance coverage or insurance policy. The insurer provides financial coverage for the losses of the insured that s/he may bear under certain circumstances MONITORING TOOLS  This involves regular and timely information for managers, members and other stakeholders for monitoring purposes. Comparing actual performance with plans to evaluate the effectiveness of the plan.  EVALUATION REPORT  An evaluation report is a paper that examines whether a product, service, or process is working, according to a set of standards. It includes an introduction, background information, criteria, evaluation, conclusions, and recommendation. BUDGET REPORT AND CASH FLOW REPORTS  MANAGEMENT INFORMATION SYSTEM  Management Information Systems (MIS) is the study of people, technology, organizations, and the relationships among them. MIS professionals help firms realize maximum benefit from investment in personnel, equipment, and business processes. MIS is a people-oriented field with an emphasis on service through technology.  a document that provides detail on the overall status of the project or specific aspects of the project's progress or performance. Regardless of the type of report, it is made up of project data based on economic, technical, financial, managerial or production aspects. BANK STATEMENTS AND AUDIT REPORT An auditor's report is a formal opinion, or disclaimer thereof, issued by either an internal auditor or an independent external auditor as a result of an internal or external audit, as an assurance service in order for the user to make decisions based on the results of the audit.  SUMMATION  Thesetools are used to see the results of the plans of an organization/ cooperative. They are used to examine or evaluate the effectiveness of the plans through the systematic controlling and monitoring of the records. If the goals are achieved and what are the recommendations to be suggested for the betterment or improvement of the cooperative.