According to the local laws and regulations of most countries, all registered NGOs/trusts are required to maintain a system for recording and submitting all types of financial transactions made by them for the purposes of implementing projects and running their organization. Since finances are a crucial part of organizational management, it is always a better idea to maintain a ‘Financial Policy’ for following procedures to keep the accounting system effective, transparent and easily manageable. Non-Governmental Organizations (NGOs) have a vital role in tackling social, economic, and environmental issues worldwide. Even with their commendable goals, proper financial management frequently poses a significant obstacle for NGOs. Effective financial practices not only guarantee sustainability but also foster trust among donors, stakeholders, and beneficiaries
The legal framework in India for NGOs/Trust offers a structure for their registration, operation, and financial resource utilization.