Best Practice in the Financial Management Systems of Group Training Companies
Welcome to the “How-To” guide for best practice in financial management systems of Group Training Companies.
FutureStaff has been asked to produce this guide with the aim of demonstrating and promoting group training best practice in strategic business and financial management to the group network.
As part of the original project funding, FutureStaff undertook to identify, demonstrate and document those aspects of best practice that impact on financial management systems and compare key indicators with at least one other best practice organisation.
This material has been prepared as part of a government funded project for Quality Arrangements in Group Training, and as such all copyright belongs with DEEWR. The views and opinions expressed in this document are those of the author and the project team and do not necessarily reflect the views of the Department of Employment, Education and Workplace Relations.
On this page:
This Project
Project Outline
The project required FutureStaff to benchmark it’s own practices in financial management against other Group Training Providers with the aim of identifying and demonstrating “Best Practice” in these systems and developing a “Guide” for others to achieve best practice.
In addition to our volunteer benchmarking companies we have the benefit of a study undertaken in March 1998 by consultants Dench McClean (A review of Financial Best Practice in Group Training Providers, 1998) that provided a very broad analysis of financial best practice in Group Training and within their data provided significant pointers to recommended measurements and industry trends. Combined with FutureStaff’s own internal practices, policies and reporting ratios it has been possible to perform a comparison with some reasonable validity and to make general recommendations about our experience of best practice in financial management systems.
Project Results
Essentially, the results of our benchmarking exercise confirmed the results provided in the report by Dench McClean in identifying a number of financial ratios as significant indicators of financial best practice. Within the results of our project we also specifically identified debtor management and working capital as two significant indicators of organisational performance and factors that warrant special attention within Group Training companies.
Company Profile
FutureStaff has been the peak body in the provision of traineeship services for the finance sector for over 10 years. Beginning as a social value organisation, FutureStaff (as the Credit Union Traineeship company) was born out of the credit union movement’s wish to provide an employment stream for young school leavers and support the development of skills and professionalism in the movement.
We maintain our primary commitment to social value and creating genuine employment opportunities for young people, reflected in our strategic objective and organisational practices.
What you can expect to gain from this guide
This Guide
As a result of the original benchmarking exercise this guide was created to help identify some key ratios and best practice measures that Group Training Companies might use to measure their performance, as well as provide some systems information and templates to be utilised in their own company operations.
This guide has been prepared as a “formative” study, covering the first layer of best practice behaviours in financial management systems. As such it does not answer all the questions about how to achieve best practice but hopefully provides some guidance of how to begin the process.This “How-To” guide has been prepared to provide some examples of how achieve best practice in your financial management systems.
Importantly, this guide should not be seen as an accounting tool; rather it will point out some ideas, checklists and strategies that you might use to develop best practice.
It has been broken down into the four distinct areas of:
Board and Strategic Influence
- How does a Board and strategy influence your financial management systems
Financial Management Systems
- Internal Audit
- Management accounting
- Management reporting
- Trained staff
- Budgetary management
Financial Analysis – Case study
- Key indicators and ratios
Systems/Procedures/Checklists
- Debt collection
- Policies
- Practices
“Best Practice”
An Introduction
“Best Practice” is difficult to conclusively define in the concrete world of financial management systems. “Best Practice” is fundamentally about continuous improvement and is at its most useful when it informs growth opportunities and new areas of business or income. Unfortunately, financial management systems (and especially financial ratios such as we will be using) are invariably diagnostic tools that rely purely on historical data (and therefore on organisational decisions that you probably made months ago). Whilst a good financial management system might alert to income or organisational deficiencies (or successes) it still requires an executive decision to take that information and implement remedies or strategies within the organisation.
For the purpose of this project we have tried to determine those measures of best practice that can inform any business result without loading value statements about the “quality” of the organisation into the equation.
With this in mind we have taken the principles of best practice to focus around four primary issues:
- Deliver success – Inevitably best practice should be measured by results, and as long as they deliver the results planned for and anticipated than they can reasonably be considered as having elements of best practice.
- Ensure quality – It is inherent within the concept of best practice that quality should be a measure of the result, product or the success that is ultimately delivered.
- Support business integration – Best practice cannot be restricted to one business unit without eventually suffering from a lack of support in other business units.
- Facilitate continuous improvement - Best practice is a dynamic concept that learns from previous incidents and practices. It should incorporate continuous improvement as an integral feature.
Subsequently, the information that follows in this guide only includes systems that satisfy the above rules and should assist you to measure your own systems against these benchmarks and implement systems where you have none currently.
The "How-To" Guide
Following are the four areas of the “How-To” guide for best practice in financial management systems of Group Training Companies. Click each link to be taken to a new page.
- Strategic Management
- Financial Management Systems
- Perfomance Indicators and Organisational Measurements
- Checklists and Procedures
