Overview of financial management and planning
- Yes, the CEO should be removed from the review and check the approval process of the nonprofit organization. However, there are certain types of financial controls that the organization should replace the CEO as the signatory for checks (Murphy et al. 2010). They include bank reconciliation, cash receipts, vendor listing, bills for payment, and accounts payable ledgers.
- Organizations that do not require employees to document the purpose of travel even though they submit an expense sheet do not meet the generally accepted accounting standards (Berkeley). According to these standards, both the expense sheet and the purpose of the trip are mandatory requirements for the processing of the expense report.
- Fundamental concepts of management of financial controls and their importance.
- Cash flow management
Cash flow management is the process through which a company maintains control over the outflow and inflow of funds (Lam, 2014). It is an essential concept in financial control as it ensures solvency and creditworthiness of the organization. Also, it enables investment and Capex and boosts employee and vendor relations.
- Budgeting
Budgeting recognizes the available capital, gives an estimation of expenditure, and predicts the incoming revenue (Lam, 2014). Organizations measure their performance against spending by referring to the budget and make sure that there are resources to support business initiatives, growth, and development. Also, budgeting allows the business managers to focus on the flow of funds, improving profits, decreasing costs, and increasing returns on investment.
- Reporting
Reporting provides a means through which the overall health and performance of a business can be tracked and analyzed (Lam,2014). At the same time, it allows for the identification of opportunities for development and areas that require improvement.
Reference
Berkeley, L. Travel, and Expense Policy.
Lam, J. (2014). Enterprise risk management: from incentives to controls. John Wiley & Sons.
Murphy, D. L., & Tibbs, S. L. (2010). Internal controls and the cost of fraud: An empirical investigation. Journal of Corporate Treasury Management, 3(2).