Financial management system necessary for every cooperative

After a funny opening of the financial management training in Menghai, China, by introducing each other: is there still fear for the difficulties of the financial jargons and worries about the boring content? No, the answer is no, look at the relaxed state, the big smiles and laughter. Instead the group is motivated, then let us enjoy the interesting training time together!

 

The training starts with 4 key questions: what is financial management? Why is financial management important? Who is responsible for the financial management? How to achieve best practices? And since then, the participating discussing and sharing also starts.  Answers like “about money”, “get to know incomes and expenditure”, “accountant”, “also chairmen”……. come up to their minds. And yes, their answers are correct, just not complete. That is why we start with creating an awareness that “financial management is not only the business of financial persons (cashier and accountant), but related with all people in a coop”. “Financial management is not only about legal requirements, but a system or a tool to maximize the results by planning, organizing, monitoring and controlling our money”, and “it is a good system to prevent loss and protect staffs”.

 

Four building blocks to achieve the best financial management are presented, discussed, shared in detail during the next 4 days. The 4 building blocks are: Financial planning, Accounting records, Financial monitoring, and Internal Control. Various learning methods are used to stimulate interest and to grasp the different learning styles of the participants, including illustrated presentations, group exercises and debates, practical case studies and practical problem solving activities. Games, songs and jokes add energy for all of us, funny and relaxing.

 

We have participants from 6 cooperatives (who established a cooperative federation together), some of them are bigger and existed already longer than the others, and they have a better financial management system (including accounting). It is a good combination, that cooperatives, which are good and which are still improving relatively ,are together in a classroom. At this way the one who has good experience can share with the others how they do it, for example in the accounting day, when we talk about when there are no official recognized payment vouchers.They shared that they can make internal receipts for members transaction, for the small amount, they can approve it with 3 leader’s signatures, etc. it is a really a practical exchange and learning. And with those very practical exercises, it is easier for them to understand the contents, especially for the small and young cooperatives. Besides those small and young cooperatives, who can get to know the importance of Financial management and start to have some idea on how to improve it. For the big one, it will build their confidence to continue the good practice.

 

 

In China, we have an old saying that when you are poor, no people ask if you are doing things correct, but when you get rich, everybody is staring at you and is supervising you. It can be the same logic for financial management for a cooperative; when a cooperative is small and doesn’t have too much profit, both the member and outsider will not put too much attention on if the accounting records are correct and regulated. However, when a cooperative is becoming bigger and richer, many eyes are focused. From members, they care how to distribute the cake, from supervisor authority, they check if you follow the legal requirements by checking records since the starting year. This is one example why we need to have financial system and records. Besides, we can get information and use them. Therefore, a financial management system is not only necessary for a big cooperative; it is also very important for a small and young cooperative, which will help to prepare the members for future. Start from the beginning, benefit now and in the future, let’s start!!