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Simple financial control strategies

Rule 1: Budgeting Processes

Engage in proper budgeting processes every year:

  1. Collect and store data that can be used to predict next years income and expenditure
  2. Consult widely within organisation and obtain views from organisation personnel as to probable changes in programs in next financial year
  3. Develop a detailed forecast of income and expenditure for next financial year
  4. Produce a forecast of the cash balance (bank balance) for each month of the next financial year

Rule 2: Reporting Procedures

Develop a reporting procedures that provide the management committee with key financial data on a regular basis (i.e. at least monthly).

Key data could include:

  1. Cash balance
  2. Total wages costs and hours worked
  3. Key sources of income e.g. gaming machines, bar sales, canteen sales
  4. Unusual or above budget expenditures

Rule 3: Cash Management Procedures

Develop cash management practises:

  1. Set a limit to the amount of money that can be spent without full committee approval
  2. Supplier's invoices should be signed and approved by the person who ordered the good or services in the first place.
  3. Petty cash should be disbursed only on receipt of tax invoice or receipt.
  4. Ensure cheques require two signatures before funds can be drawn from the bank account.

Rule 4: Develop asset management procedures:

Ensure stock is counted and recorded at the end of each month

  1. Record the movement of physical assets from one location to another e.g. have a sign out book for items that are borrowed.
  2. Depreciate the value of assets to reflect true market value

 

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