Shelter Partnership

Topics: Cost, Costs, Cost-benefit analysis Pages: 2 (397 words) Published: January 14, 2011
Shelter Partnership
Lessons learnt
A non-profit organisation whose primary objective is providing a Service or “social good”, can benefit from cost accounting practices that provide meaningful data. •Simply producing a set of accounts that provide cost data for the entire entity may not provide enough information to enable meaningful analysis. •Non-profit organisations use resources and the challenge is to measure them against the goal orientated activities of the entity. •The goal orientated activities of the non-profit organisation should be classified into programs and these can be treated as cost objectives. The programs are centred on the key deliverables of the organisation and must have outcomes associated with them. •If costs are apportioned against each program, then a manager can see if it is exceeding its budget allocation, is profitable and offers “value for money”, enabling managers to measure efficiencies. •The challenge is to apportion people’s time and resources across the programs. •Running a non-profit organisation with a surplus is an advantage as strategically, it enables the funding of fixed asset expansion. It also enables the organisation to handle the ‘bumps’ of business as unforseen expenses arise. Running a non-profit organisation at a profit can have a psychological effect on donors as people are happy to give to a profitable organisation whose money is well managed. Meaningful data enables managers to make sound decisions in the event of unexpected donations. •One of the main roles of a manager in a non-profit organisation is to obtain more funds. A manager may use information from management reports to ascertain any revenue shortfalls and then ‘pitch’ for government funding or more donations. •Management reports are important as they enable formation of a plan in the form of a budget and allows a manager to track performance. They enable planning of activities, the forecasting of costs and aid in...
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