7 PRINCIPLES OF FINANCIAL MANAGEMENT

Financial management is not just struggling about accounting. He is an important

part of the management program and should not be seen as a separate activity that
became part of the work of finance. NGO financial management over the
maintenance of a vehicle. If we do not give him fuel and oil were nice and the
service regularly, then the vehicle will not function properly and efficiently. Worse
yet, the vehicle could be damaged middle of the road and failed to achieve the
goals set.
In practice, Financial Management is action taken in order to maintain the financial
health of the organization. Therefore, in building good financial management
system is necessary to us to identify the principles of sound financial management.
There are seven principles of financial management must be considered.
1. Consistency (Consistency)
System and financial policies of the organization must be consistent over time. This
does not mean that the financial system should not be adjusted if there is a change
in the organization. Inconsistent approach to financial management is a sign that
there is manipulation in financial management.
2. Accountability (Accountability)
Accountability is a moral or legal obligation, which is inherent in individuals, groups
or organizations to explain how the funds, equipment or authority given to third
parties has been used. NGOs have an obligation operationally, moral and legal to
explain all the decisions and actions they have taken. Organizations must be able to
explain how he uses its resources and what he has achieved as accountability to
stakeholders and beneficiaries. All stakeholders are entitled to know how the funds
and the authority to use.

3. Transparency (Transparency)
Organizations must be open regarding the work, providing information relating to
the plans and activities to stakeholders. Including, preparing financial statements
are accurate, complete and timely and can be easily accessed by stakeholders and
beneficiaries. If the organization is not transparent, it indicates there is something
to hide.
4. Survival (Viability)
To be awake financial, organizational spending at strategic and operational levels
should be in line / adjusted to the funds received. Survival (viability) is a measure of
the level of security and financial sustainability of the organization. Manager

organizations should prepare a financial plan that shows how organizations can
implement the plan stratejiknya and meet their financial needs.
5. Integrity (Integrity)
In carrying out its operations, the individuals involved must have good integrity.
Additionally, reports and financial records must also be kept integrity through the
completeness and accuracy of financial records
6. Management (Stewardship)
Organizations must be able to manage properly the funds that have been obtained
and ensures that the funds are used to achieve the goals set. In practice,
organizations can perform with good financial management through: careful
strategic planning, identification of financial risks and make the control system and
the financial system in accordance with the organization.
7. Accounting Standards (Accounting Standards)
And financial accounting systems used by an organization must be in accordance
with the principles and generally accepted accounting standards. This means that
any accountant in the world can understand the system used by organizations