Sojeila Maria Silva of the Northern California Community Loan Fund explains what financial management and budgeting are, and how to analyze the main financial statements that are helpful in managing a nonprofit organization.

According to Sojeila Maria Silva, there are two kinds of designs in approaching financial management -- regulatory and strategic. Regulatory financial management best serves the purpose of its regulators. Strategic financial management better serves the goals of organizations. The life-cycle of an organization also plays an important role in its financial management.

Financial Management consists of Financial Accounting, Managerial Accounting and Strategic Deployment. Financial Accounting is the recording of expenses and income, along with assets and liabilities. Managerial Accounting is the preparation of reports from the historical financial data, in order to facilitate decision making. Strategic Deployment is the best possible utilization of all the resources in an organization. The key to creating useful financial reports is finding ways to convey all the necessary information in the simplest format possible.