Financial Management:*Financial System*Financial Planning*Financial Health

Submitted by:Banigoos, Clarice Sigrid Ann A.Buan, Annie Jean L.Cajucom, Kathleen Y.Lico, Clarissa Mae T.Paraico, Sharra Lexine C.

Submitted to:Architect Jayann Juliet I. Tayag

Financial Management Theplanning,directing,monitoring,organizing, andcontrollingof themonetaryresourcesof anorganization. It refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. The significance of this function is not only seen in the 'Line' but also in the capacity of 'Staff' in overall administration of a company.

Sources and Uses of FundsRevenues Acquiring Capital (8.4) looks at capital requirements and ways to meet them.Revenues to operate the firm come from projects, that is, from fees received for providing professional services. Additional sources of funds include the following: Infusions of capital from the founders when the firm is started and from new principals as ownership is expanded Revenue from associated business ventures, such as real estate development Income from interest, rents, sale of assets, or other miscellaneous sources.

Direct (Project) ExpensesLike revenues, a significant portion of a firms expenses are incurred in providing project services. These direct expenses are identified with specific projects and categorized as: Direct salary expenses, representing time charged by professional and technical staff in providing project services, as well as time spent administering and coordinating consultant services. Expenses for outside consultants working on projects. Other direct expenses for providing services, such as travel, telephone, and printing expenses. Such expense may be non-reimbursable (included in the architects fee) or reimbursable (paid for separately by the client).Government agencies may have their own definitions of what are considered to be direct and indirect expenses, and what indirect expenses are allowed within a firms overhead rate or multiplier.

Reimbursable ExpensesReimbursable expense categories are specified in the owner-architect agreement and may include travel, lodging and meals, telephone, reproduction expenses, and similar project-related costs. Charges are billed to the client and any requested documentation is provided, such as copies of telephone charges. Reimbursable expenses invoiced to the client usually include a mark-up of approximately 10 percent. A not-to-exceed limit reimbursable expenses is sometimes included in the owner-architect agreement. The architect, therefore, needs of develop a reasonable estimate that includes a contingency amount.ExpensesDirect expensesIn addition to the expenses of salaries and outside services, architecture firms incur other expenses that can be charged directly to a specific project. These expenses, which may be non-reimbursable or reimbursable, often include costs for Printing, duplication, and plotting, including reproduction of drawings and specifications Photography Diskettes, tapes, and other electronic media requested by the client CAD and other computer services associated with the project Items purchased on the clients behalf (e.g., fees, permits, bid advertising, models, renderings) Project meeting expenses Transportation, including expenses to and from the job site Lodging and meals Long-distance telephone, fax, telex, etc. Postage, courier, and overnight delivery Project professional liability insurance premiums Additional premiums for project professional liability insurance in excess of basic firm coverage Other project-related insurance premiums

Financial PlanningFinancial planning is the process whereby performance goals are established and reports are prepared to measure whether these goals are being achieved.The principal task of financial management systems is to help firms achieve their financial goals. Effective financial management requires guideposts that how where a firm is versus where it wants to be next month, next year, and beyond. The guideposts come from firm objectives: profit targets, staffing needs, and the costs of providing the level of service that management deems appropriate.