Sensitive though it definitely is, financial management is the most important part of your youth exchange project, which needs to be dealt with delicacy, caution and detail. To be discussing this hot topic means that you have applied for and earned the grant to support your project! First of all…congratulations! Now the question is…how do we handle it?
Taking care of when, how much and in which way you spend the assets from the project budget is a very responsible job, especially if you take into account the fact that it considers all stakeholders included in the youth exchange.
In order to develop a successful financial management plan, you need to ensure that all agreed and contracted obligations towards the parties involved are fulfilled. Therefore, the process can be divided in four basic phases:
- PHASE 1 – Precise identification of expenses
It is important to collect all the bills and invoices to prove the expenses that have been performed during the project implementation. Each valid receipt (invoice) must include the following items:
|date of service||address of the service provider||total amount||stamp *with some exceptions, such as public transportation tickets|
|name of the service provider||description of the service||signature of the person who issues|
Remember to make an appurtenant note for each receipt when you archive them, including information on the purpose of payment and which item in the budget it refers to. You will make your life much easier when preparing your report and monitoring your budget balance!
Try to use a simple table like the following to keep track of your finances!
- PHASE 2 – Payments
You have two different options to perform your payments: you can either pay in cash, or through a bank account. The latter is definitely going to make your life easier, both in terms of monitoring of budget realisation and in terms of reporting of costs to the donor and to tax offices according to the law.
However, the most challenging task when it comes to expenses reimbursement is related to travel costs – especially in international projects, such as your youth exchange. The task becomes complicated since some participants may travel across several borders, by different means of transportation (bus, train, taxi), submit receipts in various currencies and also have round-trip tickets, as this is usually more cost-effective. The solution to this mind-troubling task is…to have a plan! Financial management requires a meticulous and transparent way of balancing costs so that they fit within the limits of the approved budget lines and that their structure corresponds to the budget and to project requirements.
Here are some tips to help you overcome all difficulties when it comes to reimbursement of travel expenses:
|STEP 1: Consult your accountant or someone more experienced in financial management about the procedures for cPapash withdrawal or payments via the bank account.|
|STEP 2: Send precise instructions to participants including your conditions of reimbursing their travel expenses. Make sure you do this while they are still planning their traveling arrangements!|
|STEP 3: Prepare reimbursement claim forms to fill in general information on the person claiming the reimbursement (name, city, organization) and the dates of arrival and departure. It will also be really practical to have empty envelopes to collect receipts and invoices.|
|STEP 4: At the very beginning of the youth exchange, explain to participants the procedure they should follow with the forms and the envelopes (fill in the table, sign it and put it into the envelope with all their tickets and receipts).|
|STEP 5: Collect all the envelopes, compare the receipts with the items in the table, scan the tickets, count the total sum and, if necessary, convert it into the currency that you will pay in. Prepare a quittance the participant will sign as an evidence of receiving the money and try to provide the exact amount for each reimbursement.|
|STEP 6: Pay off all participants and collect the signed quittance. Do not forget to return original tickets to participants!|
|STEP 7: Pair each scanned ticket with the correspondent reimbursement claim and the signed quittance in your archive.|
- PHASE 3 – Budget control
Make sure that throughout the preparation and implementation of your project, you closely monitor the balance between the affected costs and the provided assets, in order to avoid the unpleasant surprise to not fit the budget.
- PHASE 4 – Financial reports
Create reports of your financial management in order to provide them to your donor, since this is normally one of the requirements of their support. It is important that you stick to the form and specific requirements that your donor has set and you provide all details to explain your financial management and submit all relevant documents to support your report (bank statements, receipts, quittances, contracts etc.). Similar reports may be required for internal use as well, both for your organisation and your project partners. This can help you plan and implement the follow-up or it can be an inspiration for new ideas or a source of information for strategic planning. First and foremost, it is the perfect opportunity to avoid mistakes in the future or to make fundraising for future actions easier.
Make sure you explain all differences between the expenses that were planned and included in the budget and those that were actually realised!