Purpose of this manual
It is important to underline that the procedures are about your organisation being able to be better for your beneficiaries, not about finance being jobsworth (which is how they are often regarded). That’s why it is good to put the organisation’s objectives right at the start.
You are then pointing out that this is the financial framework within which the staff have to operate, and they are expected to follow it.
You may like to include a paragraph about suggestions for improvements, because often someone has the key to sorting out clunky procedures but has no outlet, so nothing changes.
Financial objectives
This section is where you will set out any important principles that will stand until the manual is reviewed. They might be taken from your organisation’s strategy, or if you have a finance strategy, from that. For example:
- whether you aim to make a surplus, break even or in what circumstances you are prepared to dip into reserves (this will also be reflected in your reserves policy)
- whether there are particular activities that are more important and therefore that you would not risk with uncertain funding
- how you might manage the conflict between your need to charge and your beneficiaries capacity to pay
- whether you will always look for full cost recovery for new projects.
General points
This is the place to make administrative statements.
- Financial year end
- Audit or independent examination
- Details of formal accounts preparation and presentation to AGM
Review date
As with all formal documents, you need to state when this was approved, and when it will be reviewed. You should probably look to do this every two years.
You might want to break this down into sections and have a rolling review rather than tackling it all at once each time.
Templates
As an NCVO member you can download our financial procedures manual templates.
