Introduction to Finance

Introduction to Finance - THE ROLE OF FINANCE CONTROLLER...

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THE ROLE OF FINANCE CONTROLLER (FC) FC Qualifications These guidelines are intended to ensure that each incoming FC has sufficient knowledge to be able to handle the day-to-day process of maintaining the local committee's finances. Some local committees have even established official policies in their constitutions to ensure the competency of the candidate(s). Basic accounting skills (high school or university) should be an absolute must. Barring any official training, a candidate could be allowed to run after receiving approval from both the current FC and Local Committee President (LCP). Encourage finance co-ordinators. This allows members to be more involved in the local committee’s finances, while presenting an opportunity to develop potential candidates who have not had any official accounting training. Ensure a long, thorough turnover. A local committee may even wish to go so far as to develop a turnover training schedule that is implemented each year. Functions of the FC Recording: the process of accounting for the financial transactions. Budgeting: the process of estimating future income and expenditures based on the association's plans. Controlling: the process of monitoring the budgets and other financial systems. Now imagine a triangle as pictured below. In order for the triangle to be as strong as possible, you have to include all three sides. Budgeting Recording Controlling
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No matter how you turn the triangle it will look the same, indicating that no one side is more important than the other. As well, all three sides are linked, indicating their important relationship. Budgeting is probably the most difficult of the three, because of the analysis and time involved in completing it. You must understand the plans of the association and then be able to estimate the financial implications these plans have in order to prepare an effective budget. By recording consistently, in a manner, which relates directly to the budget your budgeting process can be refined so that the budgets gradually become more realistic. Starting from zero is always more difficult but then again, you have to start from somewhere. Recording or Bookkeeping is usually considered to be the most basic and therefore the place most people start when setting up the financial systems. Recording the financial transactions is also useless unless you plan to do something with the numbers you record. Controlling
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This note was uploaded on 05/21/2010 for the course FINANCE 2009 taught by Professor Wong during the Spring '10 term at Télécom Paris.

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Introduction to Finance - THE ROLE OF FINANCE CONTROLLER...

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