Financial procedures manual

Financial controls are essential to any business, be it commercial, not for profit or a charity. Not only should they safeguard the organisation from accidential or fraudulent mismanagement but they also facilitate the development of clear policies and procedures to assist the management – as well as help staff to understand their responsibilities in the day-to-day running of the business.

Underpinning all financial management systems is a series of financial policies and procedures which guide operations and lay out how your organisation uses and manages its money.

A financial procedures manual brings all these together in one document. It helps to establish financial controls within the organisation that ensure accuracy, timeliness and completeness of financial data.

The manual is generally used by finance staff, but it can also act as a reference for trustees, managers and other staff.

There is no one model of a financial procedures manual and yours will depend on the needs and structure of your organisation, typical content headings for a financial procedures manual will, however, include:

  • trustees' financial responsibilities
  • controls on expenditure – who can spend what and with whose authority
  • controls on financial assets – for example, who records cheques received and who banks them
  • exercising budgetary control – who can spend how much, on what and what expenditure needs special permission
  • controls on human resources – who can recruit, for what roles and what permissions are needed
  • controls on physical assets – for example, who can authorise the sale and lease of buildings or equipment.

In addition to the above headings, the manual may also include key elements of external financial regulations.

Source: Knowhow Nonprofit
Example of a financial procedures manual from Rounders England.

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