How to write a Financial Procedures Manual

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Financial Management is one of the key ways an organisation has of measuring its performance and is therefore a vital component of every organisation.

Underpinning all Financial Management systems is a series of financial policies and procedures which guide the operation and lay out of how your organisation uses and manages its money. The financial procedures manual brings all these policies and procedures into one document. It helps to establish controls within your organisation which will ensure accuracy, timeliness and completeness of all your financial data. It is imperative that your organisation has a financial procedures manual in place.

There is no one model layout of a financial procedures manual. Below are the content headings of a typical financial procedures manual which can act as a starting point for your own manual to be adapted for your organisation’s requirement, structure and activities.

What should be included in the Financial Procedures Manual?

1. Financial Responsibilities

• Organisation chart
• Delegation of authority
• Corporate structure
• Reserves policy
• Directors interests
• Segregation of duties

   2. Budgetary control and monitoring

• Annual budget process
• Monthly review process
• Monthly management reporting
• Review of budget v actual
• Variance analysis and investigation 

   3. Controls on Income

• Grants / Sponsorship / Affiliations fees
• Procedures in place to ensure restricted funds meet the terms and conditions of the funding organisation
• Invoicing and credit control / debt collection
• Pricing

4. Controls on Expenditure

• Procurement: policies and guideline
• Purchase ordering system (limits / authorisation)
• Petty cash policy
• Payments
• Staff expenses / expense claim forms / mileage and subsistence policy and rates

5.  Controls on financial assets /record keeping

• Bank mandate and cheque signatories
• Online banking policies / access
• Credit card policies (limits / authorisation)
• Cash handling
• Accounting records / Tax returns
• Monthly reconciliations
• Annual reporting requirements

6. Controls on Human Resources

• Staff recruitment policy
• Staff salaries
• Temp staff / consultants 
• Promotion policy / review policy
• Annual leave policy

7. Controls on physical assets

• Property and equipment
• Insurance
• Computer software and data access policy
• Stock

8. Policies and procedures for GDPR

For effective governance within you organisation your financial policies and procedures needs to be documented in your financial procedures manual and communicated to all staff in your organisation.

Please contact Deirdre McDermott if you have any further queries on writing a Financial Procedures Manual or in relation to our tax and accounting services.

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