Managers and supervisors are the final users of the budgets and play a very important role in the success of any financial budget of an organization. The success of any budget is very much depending on its implementation and control. In both process managers and supervisors play a key role. To make their actions according to the budget it is very much important to communicate all the required aspects of the budget to them. The effectiveness of managers in financial management process include working along with the corporate computer system seamlessly, ensuring that budget information is maintained, ensuring that invoice and analysis are produced in a timely manner, having a record of all financial commitments, providing projections based on forecast, providing audit trail and a proper reconciliation of financial data.
A Proper Reconciliation of Financial Data
Reconciliation refers to a process that sets of records to make sure they are in agreement. Reconciliation is used to ensure that the money leaving an account matches the actual money spent this is done by making sure the balance matches the end of a particular accounting period. Managers are responsible for the budget area and are also responsible for monitoring reports and suggesting fixes and it is one of their most significant duties. There are many methods that managers and supervisors can use to make sure there are no opportunities for misappropriations of the funds. To learn about these methods finance executives and managers are often encouraged to take help from several finances assignment writing services online in the UK.
Giving the Managers Enough Time to Contribute Well
A careful, considered approach is highly appropriate. An organization should keep following points in mind:
- One must ensure that financial management team is given ample time to contribute to the overall process providing accurate and timely information and allowing them time to comment on the budget that is produced.
- Time must also be provided for assessing the budgetary results at the end of the year and any action planning that needs to take place to resolve contingencies.
Critical Aspects TO Maintain an Audit Trail
The effectiveness of managers in financial management process includes providing audit trails. Critical aspects which are required to maintain by a finance manager for an audit trail include the requirements to have a duly authorized and appropriate source document for each transaction involving cash, a reporting system that can trace the calculations for each account back to the sum total of their source documents, methodical and regular reconciliations between the reporting system and third-party reports, maintaining an audit trail will often help identify other discrepancies in the system..
The Focus of Analysis for Managers
When a manager analyses any report, they need to evaluate the performance data against the performance objectives and make decisions and judgments on the information provided. A simple method for analyzing reports is to use exceptions and highlighting rules. Performance is defined as an exception when there is concern that it will not meet the target for the defined measurement period, measures indicate significantly lower figured than recorded previously, performance is worse than the figure recorded. The focus of this analysis is based on:
- Growth: the potential for growth in the business and the way growth is to be adequately managed.
- Stability: the degree to which the cash flows and profits achieved to provide a secure basis for growth and the service of debt.
- Sustainability: the degree to which the historical cash flows and profits achieved are sustainable in the longer term and not reliant on non-recurring items or special giants.