What financial tools does a board need?

All boards should receive the following financial information monthly or quarterly:

  • Management accounts (including year to date actual/year to date budget/original budget/re-forecast).

  • Cashflow forecast.

  • Balance sheet.

  • A narrative finance report explaining variance and the projections in the re-forecast.

Additionally, the following tools are important elements in a board ensuring effective financial governance:

  • Written finance procedures.

  • Board member(s) with specialist financial skills.

  • Reserves policy – what type and what quantity of reserves the organisation should have.

  • 3–5 year business plan.

  • Sensitivity analysis – numerical analysis of risk in the planned activities.

  • An annual management letter from the auditors.

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