Introduction to financial processes

Financial processes are the backbone of non-profit organisations, providing the essential framework that sustains their missions. These processes are critical and ensure the responsible allocation of resources, aligning all money spent with the organisation’s objectives.

Effective financial processes facilitate budgeting and planning, enabling organisations to set clear goals and track their progress. They demonstrate transparency, helping build trust among donors and stakeholders through accountability in resource management.

These processes empower non-profits to weather economic fluctuations and emergencies, and they contribute to the long-term sustainability and impact of their missions. In essence, sound financial processes are a foundational pillar that allows non-profits to deliver on their promises and make a meaningful difference in the communities they serve.

What do we mean by financial processes? They are structured and regular procedures that we use to manage our financial activities, enabling us to record all our financial transactions accurately, report and understand our financial position, plan our cashflow well, and budget for the future appropriately.

This course is about 2 different aspects of financial processes:

• Financial Practices
  We will define some key monthly and yearly financial practices that organisations need for healthy finances.
• Financial Control
  We look at 10 important internal controls that will ensure your financial reporting is accurate and your stakeholders trust your financial reports.

Let’s start by looking at some key practices in the next activity.