Over the first few weeks of 2015, I'll share 3 very smart fire department financial resolutions.
Resolution #3 - Learn somethingEvery week, I have a conversation about big money questions with someone who does not know anything about finances. Even more disturbing is that they were chosen as the most qualified from their department.
I try to be as much an educator as possible in these conversations. I don't want departments to waste money or to do something today that financially hurts them later. Yet I often get blank stares and disinterested replies. Or even worse, entrenched uniformed opinions of a mind that can't be changed.
Not knowing can hurt you a lotNow, it may be that most of these callers are people that know they aren't calling about their personal money and they aren't committed to leaving the department better off when they leave. Or they're confused or too proud to admit they don't know what they are doing. The motive is unimportant.
It's vital to learn how finances work. To know the difference between assets and liabilities, expenses and revenues. It's vital to know what your financial condition is saying about where you stand and what you will be able to do in the future.
If no one on your department knows, invest some time and money by hiring someone who can help you - a CPA or banker, for example, who can educate your department (or at least the key people) about what financial records to keep, how to keep them properly, and how to use them as a tool to running your department.
SummaryThe costs of running a fire department are getting large. And big money budgets can allow big money mistakes to happen. Knowing more about finances will help you and your department.
John R. Hill