FINANCIAL MANAGEMENT

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Definitions

1. as in my experience an organization always spends all it makes, financial management on an international level consists not of carefully balancing income above outgo in an effort to save a surplus in an organization, but of (a) preventing an org from spending more than it makes and (b) setting aside enough money from its income to care for salvage operations and salvage expenses. (HCO PL 18 Jan 65)

2. financial management is ordinarily done by the Association Secretary, the Organization Secretary or the Treasurer and possibly, in some cases, the Director of Accounts, but is always under the direct responsibility of the Association Secretary no matter who wears the hat. It is the purpose of the hat to ensure solvency of the organization and its divisions. The basic principle of financial management is a simple one. Income must be greater than outgo. (HCO PL 3 Jun 59)

3. purpose: make certain the organization makes money and continues in good credit. Hat worn by: the Association Secretary and by his deputation, the Director of Administration. Policy comes from Association Secretary. Execution comes from Director of Administration. Financial management guarantees solvency. It does not concern itself with accuracy of bills, payments or collection. This is the job of the Treasurer and by deputation, the Disbursement Clerk. The cost of an item must be less than selling price. All pertinent items to cost no matter how remote are part of the cost. Using this rule, financial management prices items. He adds to cost all profit that can be made and still make the item sell. He publishes, then, an item's "price." That the price of an item is collected is the business of the Treasurer who issues proper orders concerning it. Financial management must now establish cost and price of all items sold. And must adjust, for organization credit, what bills must be paid in concert with how much money there is to pay them. (HCO PL 15 May 70 II, Financial Management)