Financial Management

Financial management involves planning for the longevity of your organization. By collecting and analyzing financial data, organizations can better understand their current market position and anticipate future outcomes. Sound financial management allows an organization the flexibility to allocate its valued resources amongst its competing business opportunities.

  • By understanding and projecting revenues, financial management helps to develop a solid business model that outlines a steady stream of positive cash flow
  • Financial planning quantifies the resources available and controls the size and timing of expenditures, allowing the organization to maintain sufficient cash reserves
  • Setting benchmarks encourages organizations to strive towards pre-determined financial goals. Benchmarks help the leadership compare the value of the organization to other competitors or broader industry standards
  • Strategic financial management programs identify and manage both market-wide and entity-specific risks, giving decision-makers an opportunity to minimize the impact those risks will have on the organization’s stability

Successful organizations achieve Financial Soundness. Revenues matter since you must have money in the coffers today before planning to open the doors to your customers tomorrow.

Effective financial projections then become the cornerstone to a successful operation. Actively managing when to receive funds and when to pay expenses gives the organization control over its stability. This control also protects the organization from needing to suspend services, cancel programs, or reduce staff support in order to conserve limited reserves. With that in mind, organizations should implement financial practices that contain many of the following steps:

  • Link all financial decisions to the organization’s Vision and Mission
  • Establish budgets where Program Managers can pro-actively oversee the contract requirements while maintaining the flexibility to course-correct
  • Set Goals and benchmarks that follow measurable ROI requirements
  • Approve projects that have a positive net present value (where the present value of projected cash inflows is greater than the present value of projected cash outflows)
  • Take calculated risks that generate strategic and sufficient financial rewards

Failing to utilize best-of-market financial practices increases the chance an organization will underperform. Organization leadership will be hesitant to invest in growth-oriented projects, act on new business opportunities, and take strategic risks. However falling too far behind the market and competitors compromises the long-term stability of business operations.

Organizations can evaluate their current financial management program be asking various questions:

  • Do you have the necessary resources to fulfill your mission and meet your customer needs?
  • Have you accrued sufficient operating funds to offer flexibility in resource allocation and funding decisions?
  • Do you have a cash reserve or rainy day fund?
  • Are you able to attract and maintain a strong workforce?
  • Do you run each project through rigorous ROI valuation process
  • Do you have the resources to take calculated risks that lead to strategic rewards?

VMG Service Offerings
Financial Management

VMG is committed to working with organizations to develop a financial management program that:

  • Develops Strategic Plans to support sustained operations through the Business Life Cycle: Operating as a Start-up, Excelling as a Growing Company, Maximizing opportunities as a Mature Operation, Divesting from a Declining Market
  • Incorporates financial practices that support the organization’s Vision and Mission
  • Evaluates current financial benchmarks, ensuring the benchmarks reflect market trends, internal dynamics, and business requirements
  • Creates financial reports that aid leadership and project managers in making critical decisions
  • Evaluates the current expected return (ROI) for programs and services
  • Establishes budget review process that is regularly evaluated and revised by Program Coordinators and Service Directors
  • Determines when reserves can be used to fund new, strategic, off-budget projects
  • Evaluates financial budgeting, revenue forecasts, and cost center management
  • Revises financial benchmarks and goals to improve the stability of operation
  • Develops a change management/communication plan to implement new financial policies, procedures, and controls
  • Secures sufficient accounting services that match the size of operation
  • Selects a full-time or independent professional to manage the accounting and financial management needs