Program Financial Management includes identifying sources of funding, integrating individual project budgets, developing a overall budget and controlling costs throughout the lifecycle.
Program finance management sets the structure for managing finances efficiently. Key elements of finance management includes aggregating the individual project budgets as well as budget for the effort involved in managing the initiative as a program.
A program is a financial investment. The ability to steer the program within the budget limit has a direct impact on the organizations revenue. A common understanding of the cost drivers and the cost limits are essential in finance management.
The primary purpose of finance management is to ensure that the program is completed within budget, and that the finances are managed in a way that is in accordance with the organization’s rules for financial control.
Program managers are generally involved in financial management of the initiative starting from the initial pre-approval stages.
The first process under financial management is Establish Program Financial Framework. This process falls under the Initiating process group and is generally performed at the beginning of the lifecycle.
Connecting the phase, process group and the process, it would be the Program Initiation Phase, Initiating process group and the process falls under Financial management knowledge area.
The process Establish Program Financial Framework is about determining the funding sources for the program and creating a plan for managing funding flows and ensuring money is spent efficiently
A Program’s financial framework varies according to the environmental factors in which the program operates. Common environmental factors that affect the financial framework of a program include cost, size, geography, industry and duration.