Manual of Practical Management for Third World Rural Development Associations
Financial management
Written in a simple and direct style useful for training administrators of small groups or associations and those who manage development projects. Volume 2 of this guide covers all aspects of financing an association. The second volume looks at all aspects of financial management for small development NGOs and associations. Financing an association and its activities is considered first including non-financial resources, fundraising and local financing. It suggests credit and savings as a way to reduce dependency on donors. It continues with how to organise savings and credit systems and how to manage money with accounting systems, budgets and cash flows. Financial management of small projects, accounting systems and profit and loss accounts are considered in more detail. Case studies and sample forms are given at the back. As in the first volume, the index aims to guide readers to the section they want using keywords. A glossary explains all the financial terms used. The book would be useful to small organisations with little experience of financial management or as a training resource. It is also a good introduction to some alternatives to donor funding.
Published: 1997
Pages: 208
eBook: 9781780445427
Paperback: 9781853394058
| INTRODUCTION | |||
|---|---|---|---|
| Part I | |||
| FINANCING AN ASSOCIATION | |||
| AND ITS ACTIVITIES | |||
| A. The non-financial resources at hand 2 | |||
| B. Internal financial resources 3 | |||
| C. Possibilities of local financing 4 | |||
| D. International fund-raising 5 | |||
| E. How to create flexible funds or revolving funds 12 | |||
| F. Planning for the end of aid 14 | |||
| ANNEXES | |||
| 1.1 List of persons/organisations who could support the | |||
| Association | |||
| 1.2 Criteria for selection of projects | |||
| 1.3 Summary of a request for financial aid for a local project | |||
| 1.4 Summary of a project report to be forwarded when requesting | |||
| financial aid | |||
| 1.5 (a) Specimen agreement between an Embassy and a local association | |||
| to obtain finance for a small rural development | |||
| project | |||
| 1.5 (b) Funds governed by Missions (Embassies) - Approval document | |||
| of a project | |||
| 1.6 Profile of a report requesting funds or a rural development | |||
| project | |||
| 1.7 List of addresses of donors | |||
| 1.8 Technical characteristics of flexible funds (SIX'S) | |||
| 1.9 Peasants of the Sahel innovate a new international aidsystem | |||
| Part II | |||
| SAVINGS AND CREDIT SYSTEMS | |||
| A. A local level savings system 18 | |||
| B. Access to credit 22 | |||
| C. Collateral / Guarantee 28 | |||
| ANNEXES | |||
| II. 1 Specimen Promissory Note | |||
| 11.2 Specimen Personal Guarantee | |||
| 11.3 Questionnaire to obtain a RAFAD Guarantee | |||
| Part III | |||
| SIMPLE ACCOUNTS, BUDGETS AND CASH-FLOWS | |||
| A. The accounting system 30 | |||
| B. Accounting documents 31 | |||
| C. Keeping the books of accounts 32 | |||
| D. The budget 34 | |||
| E. Cash-flows 43 | |||
| F. Management of stocks 46 | |||
| G. Management of vehicles 49 | |||
| ANNEXES | |||
| 111.1 Specimen CASH Vouchers | |||
| (a) Receipt for payment made by the Association | |||
| (b) Receipt acknowledging payment made to the Association | |||
| (c) Cash voucher | |||
| 111.2 Specimen BANK Documents | |||
| (a) Opening of a Bank Account | |||
| (b) Cheques: crossed, nominative, bearer | |||
| (c) Debit Note | |||
| (d) Credit Note | |||
| (e) Transfer Order | |||
| 111.3 OOODS Account Vouchers | |||
| (a) Order Form | |||
| (b) Delivery Form | |||
| (c) Invoice | |||
| 111.4 Example - a km. cost calculation of a Toyota van. | |||
| Part IV | |||
| MANAGEMENT OF SMALL PROJECTS | |||
| A. Management of a cereal bank 54 | |||
| B. Management of a rice mill 60 | |||
| ANNEXES | |||
| IV. 1 Determining the estimated stock of a Cereal Bank | |||
| IV.2 Calculation of profit for a Rice Mill | |||
| Part V | |||
| ACCOUNTING SYSTEMS | |||
| A. Keeping accounts 66 | |||
| B. Accounting procedures 67 | |||
| C. The accounting system of a development association 68 | |||
| D. Accounting methods 69 | |||
| E. Classification of accounts 71 | |||
| Part VI | |||
| PROFIT AND LOSS ACCOUNTS | |||
| A. Preliminary balance sheet 76 | |||
| B. The distribution of income and expenditure 78 | |||
| C. Depreciation 82 | |||
| D. Cost calculations 85 | |||
| E. Profit and loss account 88 | |||
| F. Final balance sheet 90 | |||
| ANNEXES | |||
| VI. 1 Example of a Profit and Loss Account of an irrigation | |||
| project for providing water to 10 hectares of riceland | |||
| VI.2 Practical exercice "Accounting of a local association" | |||
| Part VII | |||
| FINANCIAL CONTROLS AND JUSTIFICATION | |||
| OF EXPENSES RELATED TO GRANTS | |||
| A. Justification of funds received from donors 94 | |||
| B. Financial control / auditing 96 | |||
| ANNEXES | |||
| VII.1 Specimen of Accounting Documents submitted to donors | |||
| (a) Coveting letter | |||
| (b) Detailed Financial Statement | |||
| (c) Summary of the financial assistance received | |||
| VII.2 Cash Control Form | |||
| VII.3 Bank Reconciliation Form | |||
| VII.4 Expense Account | |||
| VII.5 Inventory of Goods | |||
| VII.6 Controls to be effected within an Association | |||
| INDEX and GLOSSARY |
Fernand Vincent
Linden Vincent is Professor of Irrigation at t he Department of Irrigation and Soil and Water Conservation, Wageningen Agricultural University, The Netherlands, and was formerly a Research Fellow at t he Overseas Development Institute.
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