Treasury
/ Accounting Essentials
These notes are based on
the principles outlined in the Running for Sport Module originally from the
Hillary Commission.
The Basics
1) Secure Accounts - a cheque account requiring 2 signatures to authorise with
expenditure checked by committee
2) Money Collection and Recording System – someone to collect money
other than the treasurer to reduce the workload or a system that is easy to
track.
Basic “Equipment” Check List
Calculator / Computer * Receipt Book *
Deposit Book * Cheque Book * Bank Account * Cash Book * File System * Petty
Cash Box and Book
Cash Flow
If well organised you can do a cashflow
forecast but it should be sufficient to check key dates in the year for large
payments and income to make sure you will always have enough on hand. Allow for delays in receiving major income
such as subs etc.
Make sure that there is no period where
income exceeds expenditure.
This is extremely critical if you have
very little or no money in reserve in which case a full cashflow forecast is
important. There is a cashflow check
file on disk that you can use.
Receiving Money
Keep organizational money separate from
personal funds
Write receipts for money as it arrives in
the receipt book noting what it is for –e.g. membership fees, interclub
etc. Deposit this into the bank account
as soon as possible
Paying Money
All payments must have a bill or receipt
before being paid
Aim to pay all accounts within 1 month of
the invoice
Pay out of pocket expenses promptly.
Using the Cashbook
Use one section to record income and 1 to
record expenses allow room to include a description or breakdown of each
payment or receipt.
Receipts Itemised Breakdown
Date
Amount Subs Tournament Fees Interclub Fees
1st Oct $300
$150 $150
3rd Oct $100
$100
Payments Itemised Breakdown
Date
Chq No. Paid to Total Rent
Shuttles Fees
5th Oct 11078
Company A $500 $500
6th Oct 11079
Association B $800 $800
Monthly Bank Reconciliation
At the end of each month add up the
columns and match the cash book entries with the bank statement.
Petty Cash
Petty Cash should be drawn by cheque from
the accounts so that it is traceable. Any money issued should be recorded in
the petty cash book. Keep it under
strict control in a locked box
Income Tax
The rules change from year to year so it
pays to keep in touch with the latest rules. Most clubs should be exempt but be
careful if running say a pro shop for profit etc. If contacting the IRD sure they refer to the
Sports part of the Income Tax Act rather than treating you as a charitable
trust or non for profit business.
The IRD General Tax line is ph
0800-377-774
GST
Again confirm with the IRD but the general
rule is that unless you have a turnover of more than $40,000 (formerly $30,000)
you don’t need to register for GST. (IRD
GST line ph 0800-377-776)
website www.ird.govt.nz
Visit www.companies.govt.nz
for more information. Before deciding on
becoming incorporated check out the website and requirements above including
financial reporting requirements. See the
tools section also.
Why Do It?: Incorporation protects committee members from
personal liability if the club is wound up with debts to pay.
To become incorporated you need to
1) Get an application from for
Incorporation: (from website above or nearest Registrar of Incorporated
Societies (original and a photocopy)
2) Complete the form: you will need
signatures of 15 members and someone to witness it.
3) Rules: draft typed rules for your
Incorporated Society - you can see
copies of rules at the Registrar for similar organisations (make 2 copies
the original and a photocopy)
4) Statutory Declaration: confirming the
rules are legitimate. Should be on the
1st or last page of the rules. Must be
signed in the presence of a solicitor, Justice of the Peace, Registrar of the
Court, Registrar of Incorporated Societies or other authorized person.
Example of a declaration:
“This is the document marked “A” referred
to in the annexed declaration
of
(full name of declarant) made at (place) ….. this……day of ………
……(year)…before me”
Signed by authorizing person.
5) Send Fee and Documents: Check with the
Registrar that it is all ok then send the Registration Fee and send the
documents to the National
Processing Centre - Private Bag 92061
All expenditure and income needs to be
recorded and approved by the committee at meetings and an overall report for
the year needs to be done for the AGM at the end of the year.
The Financial Report
This is simply a record of income and
expenditure for the last reporting period and the year to date. .
End of Year Reporting
for the AGM
1) Statement of
Financial Performance (Income and expenditure)
List all receipts and payments for income
and expenditure along with totals from the previous year.
Overall Profit / Loss total.
2) Statement of
Financial Position (Assets & Liabilities Balance Sheet)
List all the assets owned by the club
(including bank accounts) and liabilities owed by the club which should
balance.
If Incorporated and your rules require an
auditor then you must have your accounts audited and you must send them to the
Registrar of Incorporated Societies at the office where your club is
registered.
Presenting information in a way that is
useable by those in management is important.
The treasurer should work closely with those needing the information and
the leaders in the club or association to ensure that the information is easy
to follow and represents the situation in the organisation.
Ideas that help – having income and
expenditure for each section of your organisation. Knowing the amount of admin is contributing
to each area so you can tell whether growing an area will increase in real
terms your income or reduce it. You may
be under charging for interclub for example and the more you grow the more time
you spend on admin, hall repairs etc and you may actually be going backwards in
terms of money made.
Profit isn’t a dirty word for non for
profit organizations. Although not
existing to make money you must have sufficient reserves as a risk management
policy to cope with down turns in either funding or membership.