In fact, most crypto projects, even the large ones, do not have any financial or accounting systems and do not make any financial plans.
But I believe that building a financial and accounting system and a financial plan are essential and important.
The system should be able to produce financial statements and financial plans regularly and present them to the community for discussion and auditing.
It gives confidence in the crypto project and makes the position of the crypto project stronger in front of investors.
It makes a big difference when you try to communicate with an investor and try to convince him to invest in your project and you do not have any financial statements or any financial plans.
It will be easier if you provide him with reliable financial statements and if he sees a realistic financial plan.
This achieves the rules of transparency and control and makes the investor more interested in investing in a project that has an integrated financial system.
In many forums of decentralized organizations, this topic is always discussed and often demanded by many members of the community.
Also, building a financial and accounting system that helps in developing a comprehensive strategic plan
This system should be able to perform the following tasks:
Part 1: Financial Accounting
1.Preparing basic financial statements: balance sheet, income statement (profit and loss), and cash flow statement
2.Organizing and building a chart of accounts for Gitcoin
3.General ledger accounts
4.Organizing all accounts of external and internal parties dealing with Gitcoin
5.Organizing revenue, expense, and treasury accounts
6.Organizing accounts of fixed and current assets, short-term and long-term liabilities
7.Trial balance, accounts receivable, and accounts payable
8.Able to provide detailed, clear, and simple reports about ox activity for community discussion, especially expense and revenue reports.
9.Ability to build financial statements and the accounting system in accordance with international accounting standards
10.Gitcoinshould build an accounting system capable of dealing with different taxes, laws, and financial regulations.
11.Building a cloud system to store all financial documents related to the transactions of Gitcoin. There is no accounting system without organized and preserved documents.
that prove all financial transactions
12.Follow Gitcoindues and obligations and set a schedule for collection and payment.
13.Developing and preparing financial regulations and laws that regulate and control any expenses or money paid from the Gitcoin treasury (with the help and supervision of the Gitcoin community)
Part 2: Forecasts and Budgets
Always begin by preparing a revenue budget.
Prepare it based on expectations for revenue or on planned goals.
For example, in the current period, we want to achieve greater revenues.
Based on a realistic plan, you prepare a budget, including the numbers we want to achieve.
Based on this budget, we prepare the operating budget and the rest of the budgets. It may be fixed or flexible.
Now we have the expected numbers.
At the end of each period, we calculate the difference between what was expected and what actually happened, find the variance, analyze it, and find out why it happened.
for example
We expected to spend $10,000 on a particular item, but we spent virtually $11,000.
What is the reason for spending $1,000 more than the budget?
It may be a normal cause, like a price change, or maybe for another reason you should check, and it’s all written in a report.
The accounting system periodically prepares a report showing the variance between actual numbers and budget, explaining the reasons for it, and discussing it with the Gitcoin community.
These discussions improve the way we prepare for the budget in the following period.
and in this way it achieves community control and effectiveness in the optimal use of financial resources.
It also helps in converting Gitcoin plans into realistic financial plans, proper planning, and increasing confidence in the management of Gitcoin.
Capital budget
Developing a new product or adding parts to an existing product may be a complex matter that requires a lot of money, time, and effort. It is considered an asset owned by Gitcoin, so it may need to build a capital budget for it.
Part 3: Financial analysis and financial models
Financial and accounting systems should be able to perform vertical and horizontal financial analysis and extract
1.Liquidity Ratios 2.Activity Ratios 3.Profitability Ratios 4.Leverage Ratios 5.Market Ratios
able to build financial models that serve Gitcoingoals
Analysis of financial ratios and horizontal and vertical comparisons of the statements and financial reports give a better idea of the strengths or weaknesses in Gitcoinand
give ideas about possibilities of development and give the management better ideas.
about the situation in Gitcoinand how to move forward.
Also, doing a financial analysis of competitors for Gitcoin(if possible) and comparing Gitcoin’s ratios with others in the same activity gives an idea of whether Gitcoin’s performance is optimal or if there are things that need correction.
Financial analysis is very important and should be done regularly.
Part 4: Cost Accounting System and Opportunity Cost
Gitcoin is an ambitious company that is always striving to develop existing products and
In the future, maybe build new products.
It also has a desire to expand and include new members of the team.
All of this needs a strong costing system that regulates the process of calculating
the costs of implementing Gitcoinideas
also be able to calculate the opportunity cost.
For example, if we have a great idea, it will cost $10,000.
and will generate revenue of $15,000, should we implement it or not?
It depends on alternative opportunities. Perhaps there are other ideas that also cost $10,000, but revenues will reach $20,000, so this will be better than the first.
Gitcoin should have a system for calculating opportunity cost, which helps in making decisions.
Part 5: Accounting Audit System
Always check all numbers, whether expenses and revenues, with original documents, verifying the correctness of all financial operations and integrity, and make sure that there is no manipulation, fraud, error, or misuse of funds, either intentionally or unintentionally.
and that any financial decision is the best and achieves the interests of Gitcoin; constantly stocking financial documents of Gitcoin in a way that can be easily viewed at any time; and verifying the validity of the declared financial statements.
and immediately reveal any financial transaction that is suspected to be against the interests of the Gitcoin community.
The financial and accounting systems should monitor the use of funds.
Part 6: Managing Treasury, Financial Resources, and Token Control
The financial and accounting systems should develop a plan for the optimal use of the Gitcoin Treasury and divide it in a way that achieves the maximum benefit for Gitcoin and reduces financial risks to a minimum.
Gitcoin’s financial resources should be managed only according to the will of the Gitcoin community.
The price of tokens is attempted to be controlled by raising or lowering it according to the financial plan and the goals to be achieved.
Part 7: Financial Risks and Financial Opportunities
The financial and accounting systems should constantly
Write reports about potential financial risks and opportunities and develop plans to deal with both of them.
and present them to the community to think about the best solutions.
Also, if there is a financial shortage, make plans to cover it.
Part 8: Attracting more funding and investment
The financial system should make plans on how to attract more funding and investments to develop Gitcoin.
Provided that these plans do not affect the independence of Gitcoin or create dangers or problems for Gitcoin,
The priority is for the independence of Gitcoin and to always be safe.
These are only broad lines, and the subject is open to discussion.
I hope that the community will interact to lay the foundation for building an accounting and financial system that achieves transparency and integrity.
and be able to prevent any financial risks from Gitcoin, which helps the management.
in setting a development plan and increasing confidence in the management of Gitcoin
So building an integrated accounting and financial system is not difficult.
All of the above can be achieved without much effort.
I hope the community will share its opinion in the comments.
I hope in the end we can build the broad lines for the establishment of a financial and accounting system for Gitcoin.
