What is Financial Management:

The use of money is all the advantage there is in having money.

- Benjamin Franklin

There are as many definitions of financial management as there are people who practice it. For most volunteer organizations, financial management can be defined as the conducting of all financial matters of the organization in a way that ensures that funds are used in a proper and efficient manner. There are several benefits for organizations which practice effective financial management:

• the spending of the organization is linked directly to its goals, objectives, priorities and programs
• there are regular, accurate reports on the financial status of the organization to members, sponsors, donors, etc.
• there is better decision-making within the organization by linking planning, budgeting and reporting
• the organization has a financial method for evaluating past performances, reflecting on current conditions and predicting future potential
• the organization exhibits a competent, professional image that will build confidence within the membership and credibility with sponsors, donors and clients

Source: Financial Management
Author: Skills Program: For Management Volunteers, 1985.