As part of its capacity strengthening initiative for national CSOs, Urur Kaab held a training and planning on financial management selected CSOs in South West State on August 15th 2021. 18 Finance Managers and officers representing 12 different CSOs received the support to boost their knowledge and skills in the field and to strengthen their internal organizational financial systems.
An organization’s financial planning should include budgets for operating and for capital. Together these comprise an Organizational Budget. Creating an annual operating budget is a familiar task. However, creating a capital budget, or capitalization plan, is often overlooked or deemed unnecessary for small or midsize CSO’s or construed as only necessary for a capital campaign.
Organizations taking part in the program benefited from our holistic hands-on approach guided by our senior Financial Management Expert Mr. Musa Noor assisted by Urur Kaab Finance Administrator Ismail Ibrahim, and Abdisalan Osman programme representative in Baidoa. The program started off with a one-day group workshop with Mr Noor explaining vital concepts in-depth including cashbooks, handling cash flow management and forecasting, bank statement reconciliation as well as use of Microsoft Excel and templates with various accounting formulas.
After participating in the sessions the participants had sense for the overall, recurring activities in nonprofit financial management. We inspected what happens in nonprofit accounting. Accounting is identifying, organizing, and reporting financial transactions.
It’s useful to understand the basics of accounting before moving CSO’s into the next major section on financial planning — that planning requires some understanding of the accounting process. One of the biggest challenges is knowing how to enter each type of transaction in the journal and ledger and many struggle with using or automating Excel sheets.
As a new or small nonprofit, their biggest challenge is likely managing cash flow — probably the most important financial statement for a new project is the cash flow statement. The overall purpose of managing your cash flow is to make sure that you have enough cash to pay current bills. Nonprofits can manage cash flow by examining a cash flow statement and cash flow projection.
Basically, the cash flow statement includes total cash received minus total cash spent. Cash management looks primarily at actual cash transactions. (Note that nonprofits must file a financial statement called Cash Flow Statements or Statements of Cash Flow — this statement is not the same as a cash flow budget.)
Later once all CSO’s have familiarised themselves with the most important concepts, using a mock data the participants practiced the concepts covered by the expert using appropriate tools, templates and desired practices, in the first session, CSOs prioritized development of cash books, income schedule, budgeting & bank reconciliation.
The second day our expert had one-on-one session to support CSO’s providing individualized technical support, coaching and mentoring with customized solutions based on their immediate needs they have developed and prepared 2020 financial reports that are ready for auditing.