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Financial management - Essay Example

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Author : wilmer95

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Executive Summary Financial management is at the core of implementing organizational objectives and goals since finances are the engine of organizational survival. Financial management practices differ in different organizations but common financial management practices are must be adhered…

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Financial management

This is different from For-Profit organizations that source their funds from shareholders who are the real owners of these organizations. Organizational structure of NGO’s and For-Profit are a bit similar in the sense that both set of organizations are managed by boards of directors. Financial management entails the processes of budgeting, Taxation and corporate governance. NGO’s typically have financial budgets prepared over the period of the activities they are undertaking. On the other hand, For-Profit organizations have their financial budgets prepared for a period of one financial year. Governments levy taxes on all organizations for the purpose of implementing public project or service provision but with the exemption of NGO’s. According to Brigham (2010, 65), the main difference between NGO’s and For-Profit organizations is the objectives and goals of these organizations. NGO’s are set up to provide charitable goods or services to people without need of making a profit. This major differentiating factor is the reason behind the differences in financial management practices between these organizations. Corporate governance is important in implementing integrity and management of organizational strategies. NGO’s are not particular in enforcing prudent corporate governance practices compared to For-Profit organizations. ...
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