Financial policies provide guidelines for financial decision making and set the strategic intent for financial management and are central to a strategic, long-term approach to financial management.  Some of the most powerful arguments in favor of adopting formal written policies include their ability to help governments: 

• Institutionalize good financial management practices
• Clarify strategic intent for financial management
• Define boundaries
• Support good bond ratings
• Promote long-term strategic thinking
• Manage risks to financial condition
• Comply with established public management best practices.