Embrace Finance's financial health checker for small charities

As a Trustee, I have read the Charity Commission's guidance on what I need to know and what I need to do with respect to my financial governance duties. I have bookmarked the Trustee Finance Toolkit and refer to it when needed.

We have a set of financial controls, we have benchmarked them against the Charity Commission's checklist, we implement them and we review them at least annually.

We are familiar with the regulatory guidance, we have a Trustee's expenses policy, we keep a register of interests, we record and manage conflicts of interests.

We have a bookkeeping system that is maintained regularly, including all relevant paperwork, and which tracks restrictions and reserves.

We set a budget and monitor it, we raise mission-aligned funds, and we have implemented a risk-based reserves policy.

We know how to assess whether we are a going concern, we understand our responsibilities if this is at risk, and we take professional advice when needed.

We prepare an annual budget in time for the new financial year. It includes the full costs for each activity, including a fair share of overheads. It shows us how much we have in reserves at the start of the year and how much we will have in reserve at the end of the year.

Our bookkeeping system gives us a reliable monthly income and expenditure report, which shows whether grants are on track or over-/under-spent, and whether reserves are in line with our policy, with a full paper trail for all of our transactions.

We maintain a rolling 12-month cashflow forecast which is kept up to date and which we review monthly. We know how much we spend each month (roughly) and we know how long our cash will last if we receive no further income at all.

We hold a short, focused financial review meeting each month to consider (a) our financial position compared to our budget, (b) our cash position now and over the next 12 months and (c) our reserve position and (d) any other financial risks or opportunities.

We understand our year-end accounting and independent examination requirements. We allow adequate time for a smooth process. Our Charity Commission register entry is kept up to date. We read and understand our annual accounts. We are intentional about the financial review in the Trustee's Annual Report.

We hold a year end review meeting to reflect on our financial position at the start of the year and at the end of the year, and on what was expected and unexpected during the year. We consider our financial future(s) for the next 2-3 years and update our reserves policy and financial planning to reflect our uncertainties and opportunities.

There is broad agreement on our current financial position - whether we are vulnerable, surviving, sustaining or thriving. We know what we are trying to achieve financially.

We anticipate the short-term financial future with an annual budget and 12m rolling cashflow forecast. Where helpful, we also have a multi-year budget.

We prepare for financial uncertainties by building sufficient reserves to manage our key risks and managing the gap carefully when we can't

We adapt as things change. We model different scenarios - worst and best case for example - when needed. We are bold and change our business model when tweaking round the edges no longer works.

We are responsive and have a system - such as a dashboard with red and green flags - so that we know not only what our risks are and how significant they are but also when we need to act.

We are financially curious. We know how much we have in income and where it has come from, we know how much we have spent and what we have spent it on, we know if we have deficits and if they are 'good' or 'bad' deficits and we know if we have enough for the rainy day and what to do if not.

We have the decision making culture and conditions to be able to expand in times of abundance and contract in times of scarcity in a money-informed, mission-led, people-centred way.