13 Finance

13. Finance

The ABC – as stated before – is a not-for-profit operation. Nevertheless, it must be managed as a business, and proper financial management is needed, both before and after establishing the organization.

All financial considerations must work toward the long-term, sustainable operations of the ABC.

There are three distinct stages of development for an ABC: the initiative stage, the pre-ABC stage, and the established – service-offering ABC stage. Each one has its own specific financial challenges.

The first two stages (initiative group and pre-ABC) will have no income side. There will be expenses only. Bad news, isn’t it?

Most probably, the established ABC needs time to build up its first audit service. During this period, it is necessary to fund (via membership fees, or other sources) the operations of the organization, without having a service in place.

Because money will be always a big issue, those embarking upon an ABC project must clearly understand the financial challenges of a such a project, prepare to cope with the financial problems, and solve them in a creative way.

The ABC initiative group, as well as the first members of the ABC, must know and accept the fact that they will have to be patient, and pay the bills, while working together on building the audit operations. There will be lots of needs for time and money.

Most significantly, the number of active participants will have a huge influence over the relative costs (membership and audit fees) for the members of the ABC. The greater the number of members, the less expensive the services.

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