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Financial Management & Forecasting

As part of the sustainability planning process, network members need to forecast the potential financial and budgetary implications of their decisions on the network's future operations. As with all aspects of sustainability planning, future budget estimates should be considered flexible and subject to change due to unforeseen changes in the operating environment (for example, changes in policy).

In addition, networks should be aware of common missteps as they plan their financial future:

  • Financial planning without strategy: It is difficult for a network to engage in strategic planning without first setting financial goals based on the network's vision. This may result in inefficient and unsuccessful budget forecasting. (See more information about strategic planning in Module 4).
  • Lack of contingency plan: Because the potential for future funding is subject to unforeseen circumstances, having a back-up plan allows for unexpected expenses and extra income.
  • Poor cash forecasting: Without a realistic idea of future cash inflows and outflows, it is difficult to make good financial decisions.
  • Lack of approval from network members: The potential for conflict among network members is particularly acute when addressing financial issues if all parties are not on board with the financial decision-making.

According to the NRHRC, other commonly cited issues that have hindered the financial planning process include: taking too long to complete, requiring too much effort, and too many people involved in the process. However, in spite of these barriers, financial planning is an important process to undertake, as it informs the feasibility of future network activities.