Finance for the aiesec ceo

The role of the President and VP Finance

You are responsible to ensure we are making sustainable decisions for the Entity.

 

"Growth from its own sake does not do any good. Growth has to be profitable and sustainable." Ram Charan, author of What the CEO wants you to know.
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Why should we do financial management in our entities?

To increase financial resources and drive growth in your entity.

There are two basic strategies:

a) Cost reduction: Improving our internal efficiency and the way we handle our resources by

•Increasing infrastructure

•Knowledge generation

•Leadership within human resources

b) Increasing sales: by having financial goals tied to our exchanges and monitoring if we are meeting these targets we can ensure more income by

•Market positioning

•Increasing clients’ experience

•Improving our products offer


So what tools have I got?

Financial Statements.

In order to have them we need to guarantee accounting. 

Accounting is the way we record the financial transactions so we can evaluate financial status and performance for making decisions in our entity.

What type of financial statement are there?

1) Balance sheet

2) Profit and loss statement

3) Cash flow statement

You can look into the finance dictionary to get to know more.


In most of our entities, cashflow is fundamental. An organization is valuable for what the cash in the bank can pay for, not what the balance sheet says. Liquidity determines more than the balance, it determines what you can invest and what you can put up with, which strategies to implement.

But what is the absolutely most important thing I should look into?

The CASHFLOW. What do we do with it?

a) Replace Work Capital (Resources that an entity needs to perform its operations without setbacks)

b) Paying debts

c) Replacement of fixed assets

d) Investment in membership

What type of actions have impact on my entity's cashflow?

1.Track the aging of your accounts receivable. Why are our partners not paying the invoices on time?

2.Be prepared for uncertainty and make sure you have reserves.

3.Review the budget efficiency, in income and expenses execution


And finally, how do I track my VP Finance?

Your VP Finance has 3 roles: Management ensures quality, remember losing a client and gaining them back costs 7 more times tan getting one new client. Legality mitigates risks and Finance leverages results

1) Accounting is being done for petty cash, banks, revenue recognition, expense recognition and payments (you have proper invoices)

2) Sales areas (exchangers and BD) know their financial targets. These goals are being met every month and/or we are readjusting expenditure accordingly

3) There is a budget execution report monthly sent to your EB/MC and a quarterly report sent to the Assembly

4) There is administrative and legal management support for the core. Things like reviewing financial model of proposals, checking the agreements, collection of payment, auditing of visas and health insurance, there is volume management of peak preparation

5) There is an assessment on finance standard fulfillment in your entity and an implementation timeline