Training Finance

- Finance Processes guidelines- Budgeting- Invoices (fatture/ricevute)- Legal

FINANCE  

like  

NEVER  BE

FORE!

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Finance and Legality is a supportive direction in AIESEC

FINANCE: backbone of AIESEC

In terms of Finance, it is crucial to provide the organization with a sustainable financial platform to enlarge the impact of AIESEC and make it possible to realize its activities in a long-term perspective.

The Legality side is supporting an AIESEC activity to make it safe and protected and to build the brand of a responsible organization.

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It helps managers to be effective and efficient managing resources to achieveobjectives and fulfill commitments to stakeholders

Financial management in an NGO is rather like maintenance is to a vehicle. If we don’t put in good quality fuel and oil and give it a regular service, the functioning of thevehicle suffers and it will not run efficiently. If neglected, the vehicle will eventually grind toa halt and fail to reach its intended destination.

In many NGOs financial management is given a low priority. This is oftencharacterized by poor financial planning and monitoring systems.

But NGOs operate in a changing and competitive world

Financial management:Why is it needed?

CHANGE

PLANNING: is basic to the management process and involves looking ahead to prepare as well as possible for the future. In the course of putting a plan together managers will consider several possible alternatives and make a number of choices or decisions. Planning must always precede the doing!

ORGANIZING: the resources of the organization – staff and volunteers, vehicles, property, money – have to be coordinated to ensure implementation of the overall plan. It needs to be clear what activities and responsibilities are to be undertaken, when and by whom.

CONTROLLING: A system of controls, checks and balances are essential to ensure proper application of proceduresand resources during programs implementation.

MONITORING This involves producing regular and timely information for managers and stakeholders for monitoringpurposes. Monitoring involves comparing actual performance with plans to evaluate the effectiveness of plans,identify weaknesses early on and take corrective action if required

…the financial resources to achieve objectives.procurement and utilization of funds of theenterprise

TOOLS  of  FINANCIALMANAGEMENT

What is Financial management?

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1. Financial Planning and Forecasting2. Financial Controlling and Monitoring3. Financial Risk Management4. Revenue generation5. Financial Reporting

But not just bookkeeping and management of financial transactions!

IN PRACTICE

Main Financial Management Processes in AIESEC

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MORE IN PRACTICE

It is the process of estimating the capital required, investments and administration of funds of an enterprise.

It involves building both longer term funding strategies and shorter term budgets and forecasts.

This review stage is very important to the financial planning process since it will highlight areas where the plans did not happen as expected. This learning process will help to identify revisions which need to be made to the plans.

And so the cycle continues... Plan, Do, Review

1. Financial Planning and Forecasting

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MOREMORE IN PRACTICE

SLIDES “Budget management plan+ guida GCDP”

1.1 The Budget!!!

The budget is like an awesome shopping list:

What do I need? How much money do I need? What do I have?

AWARDsneeded for eventual

BE CLEAR in the COST!!

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MOREMORE IN PRACTICE

1.1 The Budget!!!

BE CLEAR in the COST!!

i.e. now VAT (Iva) is at 22%

All financial planning processes in AIESEC can be conditionally divided into 3 parts:

a. Long-term Planning (Budgeting);

b. Re-planning;

c. Short-term planning (forecasting)

General Rule: the PROCESSES

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Financial risk management is the balancing of risks and controls within anorganization so as to achieve organizational objectives. The two major components of risk management are loss prevention and loss control. Loss prevention is meant to stop the loss of an asset before it has occurred. Loss control acts to reduce a loss that has occurred or is still in the process of occurring.

Financial risk management process is made up of a number of stages which follow more or less this order:- Find sources of risks and recognize risks and threats;- Estimate the probability and impact of risks;- Rank risks according to their significance;- Decide about appropriate responses to risks;- Develop plans how to deal with a negative event;- Implement risk focused actions;- Monitor risks;- Communicate about risk related issues regularly.

1.2 Financial Risks ManagementT

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Reserve Funds provide spendable money in case of emergencies or specialopportunities and allow for covering expenses not funded by donors and grant makers.(buffer).Unrestricted money in form of reserve funds also help NGOs with cash-flowproblems. They compensate for lower earned income and raised funds than originalplanned.Finally reserve funds can serve to pay the expenses that will occur when theorganization will be closed down.

To define how much money you need for 1 month in reserves, you should count youraverage monthly operational expenses (it should include the most important costs youcan’t cut to continue operational activities). This will be your needed sum for 1 month inreserves.

1.3 Management of ReservesT

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IN PRACTICE:

IF WE HAVE MONEY, IT DOESN’T MEAN WE CAN SPEND IT

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In the world of a fast developing environment, every company, organization, association needs investment in order to begin the activity cycle of entity. AIESEC is not an exception, and its programs developed at international level represent its product that once placed on the market come to lead to social impact in society.

Two indispensable aspects of the product realization are product revenue and product costClassification of revenues by sources of generation:a. Exchange Program pricingb. Grantsc. Donationsd. Governmental Subsidiese. Other revenuesAll these sources of revenues can be raised by each AIESEC entity taking into consideration the good case practices on them present in the network.

1.4 Revenue GenerationT

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Exchange Program PricingFour exchange programs: iGCDP, oGCDP, oGIP, iGIP. These programs are different in essence but the main source of revenue to cover their necessities are prices assigned to them. As these programs are the products placed on a specific market they must have a price, a price that will be formed at the balance between market expectations but what is more important internal cost calculation.

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Reporting shows the results that an entity has at a certain time to interested bodies. “Report”: it represents an account given of a particular matter, especially in the form of an official document, after thorough investigation or consideration by an appointed person or body. In other words a report is a statement of a situation in terms of indicators, graphs, tables or description inserted into a document.

The report can consist of the presentation of the financial situation, performance indicators and other relevant indicators that come to describe as detailed as possible the current situation of the entity. Thus the presentation of a financial report is a subject of the entire reporting process within the organization. The financial reports provide relevant, reliable, and comparable financial information to the stakeholders which lead to better investment decisions.

1.5. Financial ReportingT

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LEGALRICEVUTE: La ricevuta generica è un documento redatto in carta semplice o prestampata, che ha lo scopo di indicare il passaggio di un bene (in genere denaro, ma può essere emessa per qualsiasi altro oggetto) da un soggetto ad un altro.

La fattura, in diritto, è un documento fiscale obbligatorio emesso da un soggetto fiscale per comprovare l'avvenuta cessione di beni o prestazione di servizi ed il diritto a riscuoterne il prezzo.

CHIEDERE LA FATTURA

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Membership

SLIDES “”legal membership”

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