Three key categories of monthly financial practice:
- Ensure all controls are operating effectively (e.g., reconciliations, approvals, dual authorisation).
- Accuracy of reporting depends on the integrity of these controls (“garbage in, garbage out”).
2. Analysis of information
- Understand what numbers reveal (monthly and year-to-date).
- Look at variances vs. budget, prior year comparisons, and trends.
- Requires different skills than financial control—clear explanations needed for non-financial staff.
3. Forward-looking (forecasting & planning)
- Assess how current performance impacts future decisions.
- May lead to actions like hiring freezes, increased marketing, or spending shifts.
- Regularly update forecasts as budgets become outdated.
Balancing financial control vs. burden:
- Larger organisations often have complex controls without enough staff.
- Key principles:
- Separation of duties – no single person should raise and authorise payments.
- Charity bank account only – avoid mixing with personal/family finances.
- Trustee oversight – trustees must understand and regularly review controls.
- Shared responsibility – not just finance staff; all staff must follow policies and raise concerns.
External guidance & review:
- UK Charity Commission provides useful checklists for reviewing internal controls.
- Auditors can provide external assurance that controls are effective.
Encouragement to leaders:
- Review current financial practices against this framework.
- Identify gaps and take action promptly to strengthen financial health.