2-3 notes - Financial Management Class Notes - 2/03/2010...

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Financial Management Class Notes - 2/03/2010 Indirect expenses are administrative costs. Chapter 3 Got to explain why changes are happening from what you budgeted. Time your quarterly budget analysis with your Board Meeting. Encumbered means you can’t spend it even if you budgeted it. You’re not going to spend it until a certain amount of time. They do this so they know they have the funds for a certain activity. The board would say “this is such a big item that we are going to hold this up until you get the money for it.” Look at table on page 54! Questions from table may be on the test! Non-profits should be looking at President Obama’s Budget because non-profits get their money from the federal government. Taxes may reduce the amount of donations to non-profits. Inventory is taxed in the private sector…. Works in progress. This happens every quarterly. Estimated taxes at end of each quarter. Inventory tax MUST be paid every quarter. You should use the LIFO (Last in First out) system. The value of inventory under LIFO is lower so its cheaper. Nonprofits have a balance that will look more robust under LIFO system because you get the older stuff out first. This way provides an advantage b/c people want to 2 turn everything over faster to save on taxes. Value of the first
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2-3 notes - Financial Management Class Notes - 2/03/2010...

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