Finance Standard # 6: sustainability

To ensure sustainability of the organization while maintaining healthy and effective products.

This standard describe how healthy and sustainable products or entities look like based on financial indicators.

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Checklist:

> MC+LC Sustainability level 1 (In MCs and LCs) 

Price of product>direct costs

Each X product and BD operations fulfill following requirement:

(Direct revenues of LCs&MC - direct costs LCs&MC) > 0 EUR

> LC sustainability level 2 (in LCs)

Profit of product>direct+indirect costs OR margin from first step>indirect costs

Each X product and BD oprerations in LC fulfill following requirement: 

(Sustainability level 1 of LC - (conferences and meeting costs of LC * of members in the area in the LC) > 0 EUR
when: 
             members in the area in the LC = number of members in the area/total number of members

*MC s should strive for the same but they might need additional income due to grater indirect costs (such as salaries)

> MC+LC sustainability level 3 (MC+LCs together)

Entity has a profit (consolidated)

EACH exchange product and bd operations fulfill the following requirement

Total revenues of  LCs&MC - Total costs of  LCs&MC > 0 EUR

> MC-LC Sustainability level 4

If your main revenue driver is OGV (cash cow) then allocate more HR to it so we have more revenue

> Core performance>0.7 OR EXCHANGE INCOME/TOTAL INCOME>0.7

Majority of our revenues should comes exchange products

> Months of Finance Reserves (MoFR)

Evaluate your financial sustainability according following formula:

MoFR <=0  - Critical financial situation
0 < MoFR < 3 - Dangerous situation
3 < MoFR < 6 - High risk
6 = MoFR - Optimal situation
6 < MoFR - Unnecessary reserves 

when: 
      Months of Finance reserves = Current equity/Average costs of 12 previous months

> Liquidity

Every quarter check your liquidity, the optimal values are mentioned below:

Cash (bank account + petty cash) / Short term liabilities =>1
(Cash + short term liabilities) / Short term liabilities >1,3 (shouldn't be higher than
Current assets/Liabilities

> Debt ratios

Every quarter check your liquidity, the optimal values are mentioned below:

Liabilities (short-term &long/term] / Current assets <1

Liabilities / Own equity < 3

Equity >0

> Risk assessment and management

There is a framework/tool where risks (integrity and security, finance, legal, reputation, future operations) are identified

There is a risk responsible based on the criteria

There is an assessment matrix (Probability vs. Impact)

There are action steps (Avoid, mitigate, act, transfer, ignore)

> Ensuring pipeline and fulfulling team Standards

There is a MCVP Finance in the entity that does not share other roles

There are LCVP Finance that do not share other roles

There are Finance Managers in expansions

All LCVPs Finance fulfill the team standards with their teams

If MCVP Finance has a team (for instance NSTs), then MCVP also fulfill team standards with them

> All conferences are sustainable

Your national and local conferences don't generate a loss

Conferences revenues don't depend on sales (unless their target is external)

Have conference guidelines and reports for knowledge management and transition

Education cycle for LCVPs

There is a Manual of Functions for LCVPs Finance

There is an education timeline for LCVPs Finance (that includes Team Standards and Finance Standards) performed in conferences and in virtual channels

There is coaching for LCVPFs (either by MC Finance or NSTs)

There are visits or audits performed when needed

 
 

Is your entity healthy? 

Sustainability is not the only thing you should take care about. Check what are other essential parts of organizational health model. 
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Role of financier

What is really VPF role about? What should you take care about? Check if you haven't forget something!
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Synergy with operations

If you want to go fast, go alone. If you want to go far, go together. 
African proverb
Keep your colleagues updated what you are doing. Share you knowledge and learn from them. We won't make exchanges happen without them!
CONTENT: PPT

Sustainability awards IC 2016

Time to appreciate entities striving for sustainability is here. Learn from applications how you can contribute to the achievement of this goal in your entity!
CONTENT: APPLICATIONS

Monthly MCVPF call

What has happen there? Have you miss one of our meetings with lovely AIF? Then don't hesitate to check it out!
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Monthly checklist

Find all monthly checklist for MCVPF in one place! Plan your term with it or simply check if you haven't forget anything this month!
CONTENT: CHECKLIST

Team Standards for Financiers

How to lead your finance team and why team standards are important part of knowledge for every VP? Check it in our presentation.

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Conference sustainability

Conferences are one of the biggest costs for all our entities and it is common that they bring a huge financial liability to the organizing committee. How to keep them sustainable? Read more!

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Grow from operations

Do you do everything what stands in your JD, but you still don't know how to help your operations to grow? 

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Long-term financial planning

We are planning every year our annual budgets, re-planning them every quarter... But we should also look at behind our term! Long term financial planning can help you to achieve sustainability and ensure that you grow more than one year. 

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Education timeline for your LCVPFs

In order to achieve financial sustainability and legal compliance, all LCVPFs need to receive a proper education. Check our guide how to prepare basic educational timeline for your network.

CONTENT: PPT