Effective financial management combines organization, objectives, tasks, and renewed processes by Board and management, as well as the financial stability and profits of the association. Most association financial management plans can be broken down into four elements.
These four elements include planning, controlling, organizing and directing, and decision-making. With a structure and plan that follows this, an organization may find that it isn’t as overwhelming as it may seem at first.
The Four elements of Financial Management
Planning
Identify the steps that align with the association or individual objectives.
Have you taken the time to properly establish your association’s goals and objectives? Do you know what your long-term plans are for your association, your members, and your staff? Each association goal, whether that’s profit maximation, association growth or expansion of services will require financial management and with each goal, there will be steps to get there. This includes financing, budgeting, allocating roles, client / membership research, and much more. Take time to agree upon some measurable steps that will get your association towards their goal.
Controlling
Ensure each aspect of the association follows the established plan.
Now you know your steps, do you know that each part of the association is working to achieve the objectives? This isn’t necessarily about cutting costs or determining redundancies, rather it is more about setting appropriate key performance indicators that can lead to the association goal. It’s important to make sure all staff are aware of the goals and their role in achieving that goal.
Organizing and directing
Decide on what resources are necessary to effectively carry out the plan.
Resources don’t just refer to material assets and tools. It expands over to staff, roles, budget, funding, technology & software, outsourcing services, Board of directors and more. You do not want to start implanting a strategy if you don’t even have all the resources ready to get the ball rolling.
Decision making
Make choices after investigating all possibilities and options.
Once you have established all alternatives and potential plans, decision-makers must choose which alternative is feasible and matches the goals and objectives of the association. Decision making will, in fact, coincide with the rest of planning, controlling, and organizing, as each element will need to be confirmed before moving forward with the plan.
Implementing financial plans
When handling the complexities of financial management, it’s important to break planning down into categories, aligned with the association’s goals. With the chosen plan you can then decide on the necessary software and platforms to implement your strategy and goals.
By following these four key elements in financial management for the association, it will help to streamline processes, align the Board and staff and help to progress towards growth of the association today and tomorrow.