The Benefits of Financial Policies & Procedures: Create a Bulletproof System For Your Organization

Financial policies and procedures are essential to any successful social purpose organization. They help ensure that the organization's financial operations are secure and provide guidance on handling various financial transactions. When it comes to creating a bulletproof system for your organization, having the right financial policies and procedures in place is a must. In this blog post, we will explore the benefits of having financial policies and procedures, as well as how to go about creating and maintaining a system that will protect your organization's financial interests.

Defining Your Goals

Creating a set of financial policies and procedures is essential for any social purpose organization, especially those whose primary purpose is to serve the public. Having such policies in place will help govern how money is handled and allocated, establish rules regarding budgeting, and provide clarity on the acceptable uses of funds.

For social purpose organizations, such as charities or nonprofit organizations, having clear financial policies and procedures is even more critical. The organization must demonstrate that donations are spent appropriately and that funds are managed in a manner that aligns with the organization's mission. As such, having transparent, reliable processes in place ensures that the organization is adhering to its social purpose while still utilizing the money received efficiently.

Financial policies and procedures ensure that the organization is following accepted standards and regulations while also creating a consistent system for all employees and stakeholders to follow. By creating a sound foundation for financial decision-making, the organization can ensure that funds are used in a responsible manner and that resources are being allocated correctly. With such guidelines in place, the organization can better assess risk and manage resources in a way that meets its core objectives.

When it comes to managing financial resources, having a clear set of policies and procedures in place will help any organization remain accountable to its stakeholders, both internal and external. It helps the organization stay focused on its mission and purpose while also promoting ethical decision-making when it comes to financial matters.

Creating Your Policies

Creating financial policies and procedures for your social purpose organization is an important step to ensure the success of your operations. Not only do they provide a clear framework for day-to-day operations, but they also protect your organization from risks that may arise from not following protocol. When putting these procedures in place, consider the importance of having proper oversight of financial activities and document these policies for all to understand.

To start, consider the various stakeholders involved in the financial operations of your organization and define roles and responsibilities for each. This ensures that each member knows what is expected of them, allowing for smoother operation. Additionally, creating a detailed budgeting process can be useful for tracking expenses and making sure that funds are being used appropriately. Finally, implementing internal controls such as reviews and approval processes will help to ensure that any transactions or decisions are done with due diligence.

Putting Your Procedures in Place

Creating a sound financial policy framework isn't just about setting policies, though – it also involves making sure that these policies are communicated effectively throughout the organization. When putting your procedures in place, ensure that they are well-documented and easily accessible to all staff members. Proper documentation provides transparency and accountability, as well as a reference point in case of any questions or discrepancies. Also, consider whether regular training is necessary to help keep everyone updated on policies and procedures so the benefits of the structure that the document creates can be realized. Also, there should be regular and consistent enforcement of the policies across all levels of the organization. Otherwise, the organization risks failing to comply with its policies and loses the strategic value they were put in place to create.

Reviewing & Updating Your System

For any social purpose organization, reviewing and updating its financial policies and procedures is an essential part of ensuring long-term financial stability. By revisiting the systems and processes in place, the organization can keep up with industry standards and remain compliant with relevant laws and regulations. Further, it’s important to incorporate any best practices or ‘lessons learned" into the financial policies and procedures for continual process improvements.

To review your financial policies and procedures, assess your current system. Identify areas where there are gaps in compliance or areas that could be improved. Take a look at the systems and processes that have worked well and identify opportunities to expand on those successes.

Once you have identified what needs to be reviewed, create a plan for making necessary changes. Incorporate best practices and consult experts in the field as needed. Make sure any changes are clearly communicated to all relevant stakeholders to ensure everyone is on the same page.

Finally, document the updated financial policies and procedures, and assign roles and responsibilities for each process. Set up regular reviews to ensure the procedures are being followed, and make necessary adjustments when necessary. By taking the time to review and update your financial policies and procedures, you can create a bulletproof system for your organization.

ACCESS Shared Services Can Help

By establishing financial policies and procedures, you can ensure that your organization has a bulletproof system to protect it from financial risks. Through this secure foundation, you can trust that your social purpose organization will remain sustainable and successful in the long run.

If you need assistance with your financial policy, ACCESS Shared Services professional accountants and bookkeepers are here to help. Schedule your FREE assessment today!