Understanding financial accounts & entrepreneurship

All cultural managers need to understand the finances and the financial management of their organisations. These are fundamental to informing their forward and business planning, their ability to meet their aims and objectives, and their ability to manage risk - in short, their capacity to deliver effectively. In a climate in which cultural organisations increasingly depend on income from a number of sources, including self-generated income, they also need to be able to draw on entrepreneurial skills.
 
This module provides you with the foundations of financial management and planning. It covers budgeting for projects and programmes; reading and interpreting financial information; and working more effectively, not least through partnerships. It also considers different ways in which organisations can increase their income though current and potential activities.

Indicative content

In this module you will cover a range of pragmatic matters including:

• formal structures and accountability of sole traders; partnerships; companies limited by shares; companies limited by guarantee; community interest companies; charitable trusts; the roles and responsibilities of directors and trustees
• legislation including Companies Acts; Charities Act: charity reform
• financial management - balance sheets; profit and loss accounts; management accounts; cashflow
• establishing financial procedures - spending authority; methods of payment; financial software
• audit and accountancy - Companies Act ; SORP (Statement of Recommended Practice for Charities)
• entrepreneurialism - developing different income streams and partnership opportunities
• dealing with banks and internet banking and investing
• tax and insurance - income tax; corporation tax; VAT; PAYE; insurance
• risk management.
  
  

Recommended reading

• Burns, P (2001). Entrepreneurship and small business. Basingstoke, Palgrave
• Byrnes, W. (2003). Management and the Arts. Burlington, Focal Press
• Jorion, P. (2007). Value at risk: the new benchmark for managing financial risk. 3rd ed. New York & London, McGraw-Hill.
• Luxton, P. (2001). The law of charities. Oxford, Oxford University Press
• The National Council for Voluntary Organisaions ( 2002). The good financial management guide: for the voluntary sector. London, NCVO
• Rejda, G. E. (2005). Principles of risk management and insurance. Boston & London, Addison-Wesley
• Rice, A. (2003). Accounts demystified: how to understand financial accounting and analysis. London, Prentice Hall Business
• Sayer, K. (2002). A practical guide to financial management: for charities and voluntary organisations. London, The Directory of Social Change.