The previous post on solvency asked the question “What you are doing to ensure your not for profit organisation is currently solvent and will be in the future?”   The focus of the next series of posts is to address this issue in more detail and highlight key areas that will assist in managing the solvency of your organisation.

Remember that on behalf of the community, donors, members and the government you are also managing the assets and functions of the organisation that otherwise may not exist without their support.

There are many elements to be aware of with managing the solvency of your organisation and the following areas cover a large number of them.

  • Accounting Records:  You need to ensure that your financial transactions are accurately recorded and managed.
  • Cash flow:  Do you know your short term and long term cash flow requirements and how do you manage your cash flow to ensure funds are available when needed.
  • Key Performance Indicators:  Do you use key performance indicators to measure performance against key benchmarks.
  • Finance Reports:  What finance reports do you receive, are they the right ones and how do understand what they mean.
  • Risk Management:  How do you identify and the manage risk that relates to your organisation. 

In addition to these elements your organisation must also have a strong set of policy and procedures, internal controls and an effective governance management framework to ensure the organisation is able to achieve its objectives.

Keep reading this series of post to find out more about each of these important elements.