Accounting, cash management and budget control

1Supporting documents first and foremost

Every expense must be backed by original supporting documents: approved request, purchase order, goods received note, invoice, proof of payment. No document, no eligible expense.

• Documents are numbered and stamped “paid” with the project reference to prevent double funding.
• Each entry carries a budget code (budget line) and a cost code (project, donor, location): this is what makes it possible to produce reports by donor.
• Entries are recorded in accounting software or a structured spreadsheet (cash book, bank book), as transactions occur.

2Cash and bank

• Cash ceiling: a maximum amount of cash held in the office, set by the policy and the insurance; above that, payments are made by bank or mobile money.
• Regular cash counts (for example every week and at each month end) by two people, with a signed cash count report.
• Monthly bank reconciliation: the bank statement balance compared with the book balance, with every difference explained.
• Dual signatures on bank payments above a threshold.
• Advances (to staff or for field trips): authorised, recorded and justified within a set deadline.
• Cash flow forecast: anticipate needs so as to request donor instalments on time.

3Budget monitoring

Every month, a budget versus actual report (BvA) compares, line by line, the budget, the month's expenditure, the cumulative total, the burn rate and the balance.

• Compare the burn rate with the time elapsed: in month 6 of 12, a line at 90% or 10% warrants analysis.
• Discuss the report with the project manager: activity delays, changing prices, reallocation needs.
• Respect the flexibility provided for in the contract (for example a percentage between lines); beyond that, request the donor's written approval.
• Check eligibility: the expense is budgeted, necessary, reasonable, within the project period, justified and compliant with the donor's rules.