Best practices are specific, discrete ministry activities that measurably increase program scale, effectiveness, and/or efficiency, and can be replicated by other National Ministries. Best practices should be supported by evidence (data).
Developing a written financial policy is a necessary step in establishing your ministry as both accountable and trustworthy.
Financial policies clarify the roles, authority and responsibilities for essential financial management activities and decisions. Without a finance policy, the organization is left to operate under a “what seems best to me” mindset that may be insufficient or even damaging to the organization.
Building a complete financial management system requires both an accounting system and an administrative system made up of financial policies.
A financial policy has many different functions:
1. Human Resources.
a. Someone will need to lead the development of the policy.
b. Someone will need to document the policy discussions and decisions.
c. Someone will need to gather feedback from stakeholders.
d. Someone will need write the policy.
e. Someone will need to conduct training.
f. Someone will need to lead regular policy review.
2. Collateral.
a. Document the draft(s) and final approved policy.
3. Time
a. Time to conduct a needs assessment.
b. Time to meet with stakeholders.
c. Time to write draft policy and make changes.
d. Time for the board to meet to approve the policy.
e. Time to train staff and volunteers on the policy.
f. Time to review the policy regularly.
4. Space
a. Space to hold meetings and to conduct training.
5. Cost.
a. The cost varies. Considerations include meeting/travel expenses and types of communication (email, phone, text).