A company's financial policy is the set of owner-approved rules for raising finance, spending money, managing debt and working capital, and distributing profit. Key Solutions analyses the company's financial position and accounts, drafts the policy regulations and aligns them with the accounting and tax policy.
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In short
- When: the business is growing and several managers control payments, a bank or investor asks for internal rules, or the owner plans dividends or new financing.
- You get an analytical memo and a set of regulations: customer credit, cash management, financing and dividends.
- Timing: in our experience, a few weeks from receiving the statements to draft regulations.
- Fees are agreed individually and depend on the number of entities, policy components and the state of the accounts.
- To start, send last year's financial statements and describe what concerns you most.
Goals of a financial policy
The goal is a system for managing money that lets the company fund operations and growth steadily. The strategic objectives are higher profit, a better capital structure, financial stability, transparency for owners and banks, investment appeal, and access to additional funding such as bank loans or securities issues. Tactical objectives differ for each company and follow from its current business, strategy and growth options.
What a financial policy consists of
| Component | What it sets | Document |
|---|---|---|
| Accounting policy | Valuation, depreciation and provisioning methods | Accounting policy order |
| Customer credit policy | Credit limits, payment terms, debt collection | Receivables regulation |
| Cash management | Payment calendar, minimum balance, approval limits | Treasury regulation |
| Financing | Loans, leasing, acceptable debt load | Financing regulation |
| Dividend policy | Payout share, frequency, restrictions | Dividend regulation |
Every company must set an accounting policy agreed with the owner (Art. 8(5) of Law No. 996-XIV). The other regulations are internal documents the company adopts itself. Budgets and plan-versus-actual reporting are set up under our financial planning and budgeting service.
Dividend policy: corporate and tax limits
An LLC pays dividends from net profit to members in proportion to their shares, for any period that is a multiple of a quarter unless the charter says otherwise (Art. 26 of Law No. 2275-VIII). The general meeting of members decides. Dividends may not be declared or paid if assets are, or would become, insufficient for creditors' claims that are due (Art. 27). If dividends exceed taxable profit, the company makes an advance corporate income tax payment (subpara. 57.1-1.2 of the Tax Code).
What the service includes
- Analysis of the financial statements: liquidity, turnover, capital structure, debt load.
- A session with the owner on goals, risks and managers' authority.
- Customer credit policy and receivables rules.
- Cost management policy and depreciation methods.
- Treasury regulation: payment calendar, limits, payment approvals.
- Financing and dividend regulations with tax calculations, aligned with the accounting policy.
- Financial analysis We calculate liquidity, turnover and capital structure ratios.
- Owner's goals and risks We record goals, risk appetite and who controls cash.
- Draft regulations We draft the credit, treasury, financing and dividend rules.
- Accounting and tax review We align the rules with the accounting policy and taxes.
- Approval and roll-out We hand over the pack, brief staff and set up the owner's report.
Timing and cost factors
In our experience, developing a financial policy for one company takes a few weeks from receiving the statements to draft regulations. Timing and fees depend on the number of legal entities and policy components, the state of the accounts, bank or investor requirements, and whether you need support with implementation. We fix the schedule in the contract.
What we need from you
- Financial statements for the last two years and a trial balance.
- The charter and the accounting policy order.
- Loan agreements and bank terms.
- Receivables and payables ledgers.
- The owner's targets for the year: revenue, profit, investment, dividends.
Result
- An analytical memo with financial ratios and conclusions.
- A set of financial policy regulations ready for approval.
- Changes to the accounting policy, if needed.
- An authority matrix for payments, loans and payment terms.
- A monthly financial report template for the owner.
Legal basis
Rules the work relies on
- Arts. 1 and 8(5) of Law No. 996-XIV — accounting policy defined; the company sets it with the owner's approval.
- Arts. 26 and 27 of Law No. 2275-VIII — payment of dividends in an LLC and its restrictions.
- Para. 57.1-1 of the Tax Code — advance corporate income tax on dividends.
Risks and why a contracted team helps
A financial policy written apart from the accounts stays on paper: nobody monitors the limits, and the owner's report does not match the books. Dividends paid in breach of Article 27 have to be returned, and a missed advance tax payment leads to an assessment. At Key Solutions one team handles the analysis, accounting and tax, under a contract that fixes scope, timing and liability. Corporate resolutions and charter changes are prepared by the group's lawyers at legal.ua.
Why Key Solutions
- Company
- ТОВ «АУДИТОРСЬКА ФІРМА «КЕЙ СОЛЮШНЗ», a Ukrainian limited liability company, EDRPOU code 39610085. The company's details are public in the Unified State Register (ЄДР).
- Contract
- We work under a contract: scope, timing, liability and confidentiality are agreed before work starts.
- Group
- Key Solutions is part of Innova Consulting Group: legal matters are handled by legal.ua, crypto-asset taxation by crystal.tax.
- Office
- Our office is at 77 Velyka Vasylkivska St., Kyiv. We serve clients across Ukraine remotely. The specialists who run engagements are listed on the Our employees page.
Frequently asked questions
What is a company's financial policy?
A company's financial policy is the set of owner-approved rules for raising finance, spending money, managing receivables and working capital, and distributing profit. It usually consists of several internal regulations and must be consistent with the accounting policy, the budget and the company's financial strategy.
How does financial policy differ from accounting policy?
Accounting policy is the set of principles, methods and procedures for bookkeeping and financial reporting (Art. 1 of Law No. 996-XIV). Financial policy is broader and covers how the company handles cash, debt and profit. The accounting policy is one of its components, and the two sets of rules must match.
Is a financial policy required by law?
Ukrainian law requires every company to set an accounting policy agreed with the owner (Art. 8(5) of Law No. 996-XIV). The rest of the financial policy is adopted as internal documents. Banks, investors and new owners often ask for them, and they are needed once several managers control payments.
What limits apply to paying dividends?
An LLC may not declare or pay dividends if it has not settled with members who have left or if its assets are, or would become, insufficient to meet creditors' claims that are due (Art. 27(1) of Law No. 2275-VIII). A member who has not fully paid their contribution receives no dividends (Art. 27(3)). The charter may add further limits. We also check the tax consequences under para. 57.1-1 of the Tax Code.
How often should the financial policy be reviewed?
In our experience, once a year together with the budget, and after any change that affects cash: a new loan, an investor coming in, a change of tax regime or a new business line.
How much does developing a financial policy cost?
Fees are agreed individually. They depend on the number of legal entities, the components of the policy, the state of the accounts and whether you need support with implementation. Send last year's financial statements and a short description of the task, and we will quote the scope, timing and fee.
Related services
Let's discuss your company's financial policy
Send last year's financial statements and tell us what you want to regulate: receivables, payments, borrowing or dividends. We will reply with the proposed set of regulations, timing and fee.
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