Financial Procedures Examples

Laura Parker
Feb 2024

In the ever-evolving landscape of finance process management, having a solid foundation of financial procedures is paramount. These procedures serve as the bedrock upon which sound financial decisions and stability are built. Whether you’re a small business owner or part of a larger organization, understanding and implementing these financial procedures, including real-life financial procedures examples, is a crucial aspect of effective finance process management.

Financial Procedures Examples

What are the basic financial procedures

  • Budgeting: Creating an annual budget that allocates funds for marketing, salaries, and operational costs, as demonstrated in various financial procedures examples.
  • Expense Tracking: Carefully documenting expenses, categorizing them using accounting software, as seen in financial procedures examples.
  • Invoice and Payment Processing: Reviewing invoices, matching them with purchase orders, and ensuring timely payments, as illustrated in financial procedures examples.
  • Financial Reporting: Generating income statements and sales reports to track financial performance and make informed decisions, as highlighted in financial procedures examples.
  • Internal Controls: Implementing safeguards, such as dual authorization for significant transactions, as exemplified in financial procedures examples.
  • Tax Compliance: Accurately preparing and filing annual tax returns in compliance with tax laws, as showcased in financial procedures examples.
  • Financial Documentation: Systematically organizing contracts, invoices, and receipts, often with document management systems, as demonstrated in financial procedures examples.
  • Cash Management: Performing daily cash reconciliations to ensure actual cash matches recorded balances, as outlined in financial procedures examples.

These basic financial procedures, illuminated by real-life examples, establish a strong foundation for effective financial management. They enable businesses to operate efficiently and achieve long-term financial goals.

What are the financial policies and procedures

Financial policies and procedures are foundational components of effective financial management, with policies setting the overarching rules and principles, while procedures define the step-by-step actions for implementation. 

Key financial policies and procedures examples:

  • Annual Budgeting: This policy outlines the process for creating an annual budget, specifying responsibilities and approval procedures. For instance, a manufacturing company’s policy designates the finance department to prepare the annual budget, approved by the CFO and CEO.
  • Monthly Billing: Governing the invoicing process, this policy defines invoice format, billing cycles, and approval protocols. A SaaS company might mandate generating invoices on the first day of each month, subject to approval by the billing manager before client distribution.
  • Month-End Reporting: This policy dictates the process for preparation and distribution of month-end financial reports, specifying key metrics and reporting timelines. A retail chain may require store managers to submit monthly sales reports by the fifth day of the following month.
  • Purchase Requests: Guiding procurement, the purchase requests approval procedure establishes purchase request protocols and approval criteria. Employees may submit purchase requests to the procurement department, subject to budget availability.
  • Payroll: Defining payroll processing, including frequency, tax handling, and deductions, this policy ensures consistent payroll operations. For instance, it outlines the payroll process, tax withholdings, and employee benefits.
  • VAT Returns: Compliant with VAT regulations, this procedure covers VAT registration, return submission, and record-keeping. A policy may mandate quarterly VAT return submissions in line with local tax laws.
  • Adding a New Employee to the Payroll: Detailing onboarding and payroll integration, this procedure requires HR to complete necessary paperwork when hiring new employees, ensuring accurate payroll processing.

These examples of financial policies and procedures foster consistency, compliance, and transparency in financial operations. They serve as practical guidelines for employees, bolstering an organization’s financial stability.

What is a financial procedure?

A financial procedure is a set of steps and guidelines that a company follows to manage its financial activities systematically and efficiently. These procedures are essential for maintaining financial accuracy, transparency, and compliance within an organization. When discussing financial procedures of a company, it’s crucial to understand what such procedures entail and what they should include.

A comprehensive financial procedure should encompass the following key aspects:

  • Documentation: Clear and detailed documentation is at the core of financial procedures. It involves recording all financial transactions, such as income, expenses, and investments, in an organized manner. Accurate documentation is vital for auditing and financial reporting.
  • Authorization: Financial procedures should specify who has the authority to initiate and approve financial transactions. This includes approvals for expenditures, budget allocations, and financial commitments, ensuring accountability and preventing unauthorized spending.
  • Internal Controls: Effective internal controls are integral to financial procedures. They include segregation of duties, access restrictions, and regular audits to prevent fraud and errors. Internal controls maintain the integrity of financial data.
  • Timelines: Financial procedures should establish clear timelines for various financial activities, such as budget creation, invoice processing, and financial reporting. Adhering to these timelines helps in planning and decision-making.
  • Compliance: Financial procedures must align with local and international financial regulations and standards. This ensures that the company operates within the bounds of the law and avoids legal repercussions.
  • Reporting: Regular financial reporting is an essential component. Financial procedures should outline the frequency and content of financial reports, enabling stakeholders to monitor the company’s financial health.
  • Review and Update: Companies should have procedures in place for reviewing and updating financial procedures regularly. This ensures that the procedures remain relevant and effective in changing business environments.

In summary, financial procedures of a company are the structured processes and guidelines that govern its financial activities. These procedures should include documentation, authorization, internal controls, clear timelines, compliance with regulations, reporting mechanisms, and provisions for review and updates. Implementing robust financial procedures contributes to financial stability and accountability within the organization.

What is financial management procedure

Financial management procedure, not to be confused with multiple “financial management procedures,” is a critical aspect of effective financial control, especially for small businesses. It encompasses a series of steps and practices designed to manage finances efficiently, ensure compliance, and support informed decision-making. Let’s delve into what sets a financial management procedure, particularly for small businesses, apart:

  • Singular Focus: Unlike multiple financial management procedures that consist of various individual financial processes, a financial management procedure refers to a single, overarching framework that guides financial control.
  • Comprehensive Approach: Instead of specifying individual financial processes, a financial management procedure provides a holistic approach to financial control, addressing the entire spectrum of financial management, especially tailored for small businesses.
  • Strategic Guidance: It offers strategic guidance on financial planning, cash flow management, financial reporting, risk assessment, and more, emphasizing the interconnectedness of these components for small businesses.
  • Coherence: A financial management procedure ensures that all financial activities within a small business align with its financial goals and compliance requirements.
  • Unified Direction: Rather than a collection of separate procedures, a financial management procedure unifies financial activities under one umbrella, promoting consistency and coordination, a vital aspect of financial procedures for small businesses.

For small businesses, implementing a robust financial management procedure is essential for financial stability and growth. It serves as a comprehensive roadmap, guiding financial decision-making, resource allocation, and risk management in accordance with the unique needs of small businesses.

What are the core financial processes

Understanding core financial processes within an organization is pivotal for maintaining financial stability and control. Let’s explore an illustrative financial process, demonstrating the significance of these procedures:

  • Budgeting: Budgeting involves strategically planning and allocating financial resources to meet organizational objectives. For instance, a small e-commerce business may create an annual budget to allocate funds for marketing, inventory, and operational expenses, providing a roadmap for financial decision-making. This exemplifies what is a financial procedure example.
  • Expense Management: Efficient expense management entails tracking, approving, and documenting organizational expenditures. Employees submit expense reports detailing business-related costs, which undergo review and approval before reimbursement, ensuring adherence to budgetary guidelines.
  • Financial Reporting: Financial reporting entails preparing and disseminating financial statements, such as income statements and balance sheets. For example, a nonprofit organization may compile monthly financial reports to furnish its board of directors with insights into the organization’s financial performance, facilitating informed decision-making.
  • Cash Flow Management: Effective cash flow management entails monitoring and optimizing cash inflows and outflows to maintain sufficient liquidity for daily operations. A retail store diligently monitors cash flow to cover expenses, pay suppliers, and plan for future investments, minimizing the risk of cash shortages.
  • Tax Management: Tax management encompasses accurately calculating, preparing, and filing taxes to comply with tax regulations. For instance, a small business might prepare and submit quarterly tax returns to ensure timely compliance and mitigate tax liabilities, bolstering financial stability.

Understanding these core financial processes is crucial for organizations to establish financial stability and compliance. Each process plays a distinct role in financial management, contributing to organizational success.

What is an example of a financial process

An example of a financial process offers valuable insight into the structured execution of financial activities within an organization. Let’s explore a common financial process in greater detail:

Financial process example: Invoice Approval and Payment

This essential process involves the thorough approval and timely payment of vendor invoices, ensuring the organization’s financial obligations are met promptly while maintaining accurate financial records. Here’s a more in-depth look at how this process typically unfolds:

  • Receipt of Invoice: The accounts payable department receives invoices from vendors, detailing the goods or services provided, along with relevant transaction details.
  • Verification and Matching: Upon receipt, invoices undergo meticulous verification to ensure accuracy and legitimacy. This involves matching the invoice with corresponding purchase orders or contracts to validate the goods or services received.
  • Approval Routing: Once verified, invoices are routed through the organization’s approval hierarchy. Depending on the invoice amount and organizational policies, approvals may be required from department heads, project managers, or senior management.
  • Approval and Coding: Approvers meticulously review invoices to ensure accuracy and legitimacy before providing their approval. Additionally, they assign specific cost codes or account numbers to facilitate accurate expense allocation within the organization’s accounting system.
  • Payment Processing: Approved invoices progress to the payment processing stage, where payments are initiated using various methods, such as electronic funds transfer (EFT) or check issuance. Prompt payment ensures positive vendor relationships and may even lead to favorable terms.
  • Recording and Reconciliation: Following payment, all transactions are meticulously recorded in the organization’s accounting system. This step is crucial for maintaining accurate financial records and facilitating reconciliation of accounts.

Example: Consider a manufacturing company where the invoice approval and payment process ensures timely payment to suppliers. When raw materials arrive, invoices are meticulously verified against corresponding purchase orders. Once approved, invoices are promptly processed for payment, ensuring suppliers receive their dues within agreed-upon terms.

This example illustrates how a financial process functions within an organization, emphasizing the significance of accuracy, efficiency, and compliance with established financial policies and procedures.

Why are policies and procedures important in finance

Clear policies and procedures are crucial for effective financial management within an organization. Here’s why they are essential, along with some finance policies examples:

  • Consistency and Standardization: Policies ensure consistent financial practices. For example, a policy may outline guidelines for expense reimbursement, promoting uniformity.
  • Compliance: Finance policies help ensure adherence to laws and regulations. For instance, they may define procedures for financial reporting to comply with GAAP.
  • Risk Management: Policies mitigate financial risks by defining controls. An example is a policy governing access to sensitive financial information.
  • Transparency and Accountability: Well-defined policies promote transparency by outlining responsibilities. For instance, a procurement policy enhances accountability in purchasing decisions.
  • Efficiency: Streamlined processes outlined in policies improve operational efficiency. For example, a policy on invoice processing reduces delays and errors.
  • Training and Development: Policies serve as training tools for new employees. Finance policies examples include programs on ethical financial conduct and compliance.
  • Decision-Making Support: Policies provide guidance for financial decision-making aligned with organizational goals. For instance, a policy on capital budgeting facilitates strategic decision-making.
  • Audit Preparedness: Well-documented policies and procedures support audits. For example, a policy on internal controls aids in audit trail documentation.

In addressing these aspects of financial management, beSlick software offers a comprehensive solution. Its intuitive platform allows businesses to document and automate their financial policies and procedures, ensuring consistency, compliance, and efficiency. With beSlick, organizations can streamline their financial processes, enhance transparency, and facilitate decision-making. Furthermore, the software’s robust reporting capabilities aid in audit preparedness, providing organizations with the tools they need to maintain financial integrity and regulatory compliance.

In summary, policies and procedures are essential for effective financial management, and beSlick can assist organizations in implementing and managing them seamlessly.

Policies And Procedures

What is the meaning of financial policies and procedures

Understanding the meaning and significance of financial policies and procedures is essential for effective financial management within an organization. 

Financial policies and procedures encompass guidelines established by an organization to govern financial activities and ensure compliance with regulations. They define principles for financial decision-making and operational standards. Financial policies set overarching objectives, while procedures outline specific steps for implementation.

Financial policies and procedures promote transparency, accountability, and integrity. They mitigate risks, prevent fraud and errors, and ensure regulatory compliance. Additionally, they enhance efficiency, facilitate decision-making, and support strategic planning.

Examples of Financial Policies of a Company:

  • Budgeting Policy: This policy outlines the process for preparing, approving, and monitoring the organization’s budget, ensuring alignment with strategic goals and resource allocation efficiency.
  • Expense Reimbursement Policy: Governs the reimbursement of employee expenses, specifying eligible expenses, approval procedures, and documentation requirements to maintain accurate records and prevent misuse of funds.
  • Cash Management Policy: Establishes guidelines for managing cash flow, including cash handling procedures, liquidity management strategies, and protocols for optimizing cash utilization to meet operational needs and investment opportunities.
  • Financial Reporting Policy: Defines standards and procedures for preparing financial reports, ensuring accuracy, consistency, and compliance with accounting principles and regulatory requirements, providing stakeholders with reliable information for decision-making and transparency.
  • Risk Management Policy: Addresses identification, assessment, and mitigation of financial risks, including market risk, credit risk, operational risk, and regulatory compliance risk, implementing controls and safeguards to protect the organization’s financial assets and reputation.

In summary, financial policies and procedures serve as essential frameworks for guiding financial activities within an organization. By adhering to these guidelines, companies can enhance transparency, accountability, and operational efficiency, ultimately supporting their long-term financial health and sustainability.


In this article, we explored the importance of financial policies and procedures in ensuring sound financial management within an organization. We began by defining financial policies and procedures and discussing their significance in promoting transparency, accountability, and efficiency in financial operations.

Throughout the article, we provided examples of financial policies and procedures of a company, illustrating how these policies govern various aspects of financial management, including budgeting, expense reimbursement, cash management, financial reporting, and risk management. These examples underscored the critical role that well-defined policies play in guiding financial decision-making and ensuring compliance with regulatory requirements.

Furthermore, we highlighted how effective financial policies and procedures can help organizations mitigate risks, prevent fraud and errors, and support strategic decision-making. By adhering to these guidelines, companies can enhance operational efficiency, facilitate transparency, and safeguard their financial integrity.

In addition, we emphasized the importance of considering examples of financial policies and procedures, along with financial procedures examples, relevant to your organization’s industry and size. By examining best practices and industry standards, companies can tailor their policies and procedures to meet their specific needs and objectives effectively.

Moreover, implementing financial policies and procedures can be simplified with the assistance of beSlick software. With beSlick, organizations can document, automate, and streamline their financial procedures, ensuring consistency and compliance across all financial activities. From budget approvals to expense management and financial reporting, beSlick provides a centralized platform for managing and executing financial procedures efficiently.

As you consider the examples of financial policies and procedures, along with financial procedures examples, provided in this article, remember the importance of tailoring these guidelines to meet the specific needs and objectives of your organization. By leveraging beSlick’s capabilities, you can effectively manage financial resources, mitigate risks, and position your organization for continued growth and success.

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, Author of The Dirty Word and CEO at beSlick

Alister Esam is a successful entrepreneur and investor, having bootstrapped his fintech software business eShare to international status operating in over 40 countries and servicing 20,000 board directors, before successfully exiting to a multibillion-dollar organisation in 2018. He now invests in a variety of startups and on a global mission to make work, work.