20 Questions You Should Be Able to Answer About Your Org's Financial Health
[Tip Sheet]
20 Questions That You Should Be Able to Answer At Any Given Time About Your Organization's Financial Health
Written by Laura Deaton and reprinted with permission
from www.ThirdSectorConnector.org
- For each revenue line item, are we meeting our goals? If not, how much are we off, and do we have an explanation for why?
- What are acceptable variations and fluctuations in expected revenue?
- If our revenue is seasonal, have we set calendar-based targets so that we can accurately project cash flow?
- How much of our revenue is sitting in the "receivables" bucket?
- If payments were invoiced, and expected, but have been delayed, what is our plan to assertively pursue that funding?
- If delays are inevitable, what is "Plan B" for meeting cash flow expectations?
- Do we have a line of credit that we can use to get through lean cash flow periods? How much and how frequently have we already drawn?
- Are there any revenue areas that are showing unexpected increases, and if so, are there some expanded possibilities for continuing to grow this area, or was it a one-time anomaly (e.g. an unexpected bequest)?
- Where are we most under-performing on revenue relative to goals? How are we going to get back on track?
- Are our revenue goals still reasonable in light of our changing environment? If not, do we need to consider a budget modification?
- Is there an existing or expected cash surplus? If so, how can we best use it to ensure sustainability of the organization over the long haul?
- What are our largest expense line items?
- Do we have any cushion built into those line items for unexpected costs or unplanned increases?
- What expense areas are rising, and why? Did we anticipate this when we budgeted, and if not, why not?
- If revenues are under goal, is a deficit permissible, or do we need to reduce costs concurrently?
- If we are planning to reduce costs, which are the areas that we will target, and how will we implement?
- Have we re-evaluated vendor services and contracts to try and re-negotiate lower-cost contracts? More on cost-containment and cost-reduction strategies.
- Are there programs that are under-funded or under-performing that we should consider ending? What kind of action do we need to take to move forward with doing so?
- If a deficit budget is permissible, how will we finance that deficit? Do we have an endowment that we will tap? Will we use a line of credit? What amount of deficit is permissible and for how long? More on endowments and rainy day funds.
- How are we going to share this information with the Board and staff team? Are there financial dashboards that we could create and monitor? More on dashboards.
Written by Laura Deaton and reprinted with permission
from www.ThirdSectorConnector.org
Copyright © 1993-2010 — CAPITAL VENTURE SM. All rights reserved.
Reproduction in full or part is prohibited without permission.
Reproduction in full or part is prohibited without permission.
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