DRAFT Members Only
Financial Management for Early Years Settings
Financial Management is perhaps the most important governance responsibility. Both private/independent and community and voluntary organisations need to plan, manage and control their finances to ensure that resources are used for the benefit of children and to underpin the long-term sustainability of the setting. In community and voluntary early years settings, the Treasurer plays a key role in overseeing financial management, however, responsibility for finances ultimately rests with the whole committee, who share collective accountability for governance and decision-making.
Financial management is a complex topic and will be different for each individual setting, so it is best to engage directly with Early Years' governance support through advice and training. However, there are important tasks and resources outlined below that will assist your setting in managing your finances.
The financial roles and responsibilities of the Committee or Owner:
To ensure the long-term financial health of the setting by planning and forecasting
To ensure that there is strong internal reporting internally and externally so that good financial decisions can be taken
To manage the current financial income and expenditure through efficient bookkeeping
To develop and maintain good financial control through robust financial policies and procedures
Planning and Forecasting
Two Critical Tools to Forecast Long-Term Financial Health (12 months or more)
- Download Simple Budget Spreadsheet Forecast income and expenditure to determine the financial position at the end of the financial year.
- Download Simple Cashflow Spreadsheet Forecast the timing of income and expenditure to predict the bottom line at the bank.
Reporting
Financial Reporting Tools
- Download Internal reporting, management accounts Spreadsheet Building on the budget above, use a spreadsheet to record actual income and expenditure as the setting moves through the financial year.
- External reporting Depending on their size and legal structure, settings will have to report to regulators such as the Charity Commission NI and/or Companies House . Further information on financial reporting is available via these organisations.
Bookkeeping
Tools to Manage All Financial Transactions
- Download Record sheets for income and expenditure Use simple record sheets to track all income received and expenditure incurred.
- Download Bank reconciliation spreadsheet Supports the process of comparing your internal accounting records with your official bank statement to ensure accuracy and completeness.
Policies and Procedures
- Sample financial control policy Sets out overall financial management processes and clearly defines roles and responsibilities.
- Sample reserves policy Outlines how the setting manages and maintains its financial reserves.
- Sample fraud prevention policy Provides guidance on preventing, detecting, and responding to fraud.
