What is tax management? (with photos)

Fire truck maintenance can be a fiscal expense for an emergency services department.

Fiscal management is the process of keeping an organization running efficiently within its allotted budget. While the word “fiscal” can be used interchangeably with the word financial, in most cases, fiscal management refers to the management of money within a government entity. Overall, its objective is to improve the way the department operates by properly planning, recording and executing budget-related procedures. This involves a variety of tools, including budget spreadsheets, accounting software, and guides that describe procedures for department management.

Proper budget planning and recording are essential in fiscal management.

Fiscal mismanagement is indicated by a lack of record keeping and unnecessary or unplanned expenses that can cause a department to go over budget or fail to meet its objectives. Generally, tax planning is done annually, often coinciding with the fiscal year in which the department operates. A fiscal year is normally a period of 12 months, but it is not always the same as a calendar year.

Some companies use a custom fiscal year that ends in a month other than December.

The types of expenses accounted for in a fiscal budget vary depending on the organization. Tax expenditures for an educational institution may include purchasing and maintaining property, providing electricity, and training instructors. Budgeted expenses in an emergency services department can go towards the purchase and maintenance of emergency vehicles, uniforms and advanced training for emergency services professionals.

A well-crafted management plan can provide a guide on which department members base financial decisions. Detailed budgets can help prevent financial emergencies by planning for recurring expenses that an organization regularly faces but that can come as a surprise to managers who operate without proper planning. For example, if a department has already budgeted for the cost of cleaning uniforms, the cost of cleaning will not come as a surprise that it costs an organization more than its budget can afford. Budgeting for this type of cost can also give the tax manager time to find less expensive solutions to budgeted costs. This saves you money on last-minute avoidable emergency expenses, which can cost more than if they were properly planned.

See also  What is a liquidity gap? (with photo)

Generally, good tax management involves recording all tax transactions in a check and balance system that reduces errors or omissions that can lead to staggering budget overruns. Once financial transactions are recorded, they should also be reconciled regularly, usually monthly, to help the tax manager identify any discrepancies between the financial records and the remaining budget available. Without proper and regular reconciliation, a small error in recording financial transactions can become a large deficit over time, which can create serious budget deficits.

Leave a Comment