Thanks for your support throughout the past year. I’m looking forward to providing more information and insight into not-for-profit and small business bookkeeping in 2016. Hope you can come along for the ride.
Have been using cloud computing to do non-profit bookkeeping for a while, so I thought this was a great article. In particular, being able to access information anywhere, anytime is a great bonus for non-profits. For example, with cloud based accounting software your bookkeeper and Treasurer can both access the business books whilst one is in the office and the other is at home.
Have been looking over the latest figures provided by the ACNC in relation to registered charities in Australia.
1,045,676 employed staff
1,806,495 estimated volunteers
Total income $101.9 billion
Our small charities in Australia rely more on donations and bequests, receiving 32% of their income from those sources, compared to the largest charities which receive only 2% of their income from donations and bequests. That’s a big difference.
Smaller charities are receiving 2% of their income from government grants, compared to 44% for the largest charities.
What I also thought was interesting was that the smaller charities are spending 10% of their funds on employee expenses, compared to the largest charities spending 57% on employee expenses.
What do you think of these latest figures? Do you work or volunteer for a registered charity? Do these figures surprise you?
You may have noticed I like writing about not-for-profits. How great is it knowing that your hard work is benefiting others in need? Just recently, on behalf of a not-for-profit organisation, I purchased a bull for a community in Bangladesh. The small group of ladies had been fundraising for over a year to raise the funds. I returned home at the end of the day thinking “wow – how many bookkeepers can say they bought a bull as part of their day’s work?” I felt privileged to be able to share in their excitement and sense of accomplishment.
So here are my tips for keeping finances in great shape if you volunteer or work for a not-for-profit organisation…
Have financial procedures in writing and readily available for employees and volunteers to access. Communicate the importance of following these procedures and keep them up to date so that new volunteers and employees can step in to their roles easily.
Financial information such as Profit & Loss, Balance Sheet, Income & Expenditure Statements should be made available to board members prior to meetings.
Protect your financial data. This includes regular back-up of accounting data files, limiting who you give access to online banking passwords and keeping confidential employee information in a secure location. For more on protecting financial data, you can read my previous post Reducing the risk of fraud and error.
Present your financial information in a way that is easy to understand. Encourage discussion and questions in relation to the finances of the organisation. Board members need to understand where the finances of the organisation are at in order to make informed decisions.
Have a budget in place and check for areas that may have blown-out. Budgets may not be exciting, but are a must-have.
If your organisation has employed staff to take care of the day to day bookkeeping, the Treasurer should still monitor the overall health of the organisation’s finances and ensure procedures are being followed. If you are the Treasurer of a not-for-profit organisation, you may like to read my previous post What does a Treasurer do for more tips.
Have your financials audited regularly. For some tips on preparing for audits you can read my previous post Getting ready for an audit.
I hope my tips have helped you in your quest to stay on top of your organisation’s finances.
Working for a not-for-profit organisation can be a great experience – most people involved are contributing their time, effort and money because they believe in the cause and have common interests at heart.
Just because they aren’t operating to make a profit for owners, does not mean they are not financially accountable. In fact there are usually many different stakeholders to be accountable to – including Board members, government, volunteers, staff, members and donors.
I personally love the challenge of bookkeeping in the non-profit sector and have worked with wonderfully supportive board members and volunteers.
I thought I would share some interesting facts about non-profits in Australia.
There were 56,894 not-for-profit organisations in Australia registered with the ATO at June 2013.
At present it is estimated there are approximately 700,000 non-profit/community groups in Australia.
Not-for-profits employed 1,081,900 people in 2012-13 with social services employing the most people.
Charities must have an ABN (Australian Business Number).
To be a registered charity, your organisation must be a not-for-profit that has a charitable purpose that is for the benefit of the public.
A public benevolent institution (PBI) is a type of charitable institution whose main purpose is to relieve poverty or distress (for example, sickness, suffering or disability).
The Australian Charities and Not-for-profits Commission (ACNC) is the independent national regulator of charities in Australia.
Have you been a Treasurer, bookkeeper or accountant in the not-for-profit sector? What differences and challenges did you face compared to other sectors?