Bank finance articles and tips

Budgeting or financial planning involves estimating the amount of income and the expenses of the coming financial year. This is important in that it helps in the management of goods. It is able to make an enterprise to know what it can and can not be able to do together with its achievements at the same time.

The budget should be in a position to show the goals and priorities of the organization. This enables long term planning which will enable the organization achieve its goals. In order to be able to determine all the expenses and the income received the financial reports and records should be submitted to the finance committee at all the time. The committee should not rely upon the verbal reports of the manager, accountant or the bookkeeper as the main source of financial information.

All the sources of income to the business entity should periodically hand in income and expenses budget to the committee. If examinations show other obligations hat are past due then their payment plan should be incorporated in the budget. All the expenses and incomes should be budgeted for conservatively and realistically. Any additional funds should be put aside in order to cater for future needs that the organization might face. It may be on operational expenditure or repair/capital usage.

If the entity is a school then the finance committee should be having all the copies of the whole budget of the school. This helps to determine the amount of money that the school needs and the amount of money it can be able to get from its sources. After the finance committee has gone through all the projections of income and the budgets from all the various departments and the organization should be in a position to develop a budget that caters for all the needs of the organization effectively. If the committee can not be in a position to achieve this it should then come up with other alternatives that will balance all the needs of the organization. These alternatives may be things like fund raising ceremonies, giving willingly, sharing of equipments between departments and revaluating the need for new equipments.

The budget should be balanced between the organizations goals and objectives. The financial trading year budget should be prepared and approved by the finance committee who has the final approval authority. The budget should then be at the disposal of all the members of the organization.

Cash management budgeting. This involves the anticipation of revenue and expenses monthly allowing planned expenditure to reduce cash flow problems. The organizations cash should be in balance with the expenditure of the month. Cash of more than three months should be invested. Bank balances on commercial banks should not be more than 100,000 as more funds than this are not federally insured. Loan funds are some how safe for organizational or institutional funds. To manage cash in the proper manner the organist ion should have proper knowledge of the organizations expenses and planning for the usage of money in the right and appropriate way.

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By Jone R Brown