treasurer

My 3 most popular posts of 2015

My 3 most popular postsPosts about not-for-profit bookkeeping have topped my list of most viewed posts of the past year.  Followed closely by my more general bookkeeping posts.

In case you missed them (or would like a re-cap) here they are:

  1. Not-for-profits – 6 Ways Your Bookkeeping Differs from Other Organisations
  2. What Does a Treasurer Do?
  3. 4 Common Bookkeeping Mistakes

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.

Happy bookkeeping…

 

 

 

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Figures & thoughts – registered charities

charity definition

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?

Love to hear your thoughts.

Not-for-Profits – Keeping your finances in order

charitable-givingYou 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.

Happy bookkeeping…

What does a Treasurer do?

CommunitySo maybe you are thinking of taking on the role of Treasurer at a not-for-profit organisation. But you want to know what you are getting yourself in for first? Read on for some of the more common tasks of a Treasurer.

It is the Treasurer’s job to keep the finances of an organisation healthy – so the organisation can achieve its mission. It’s an important role and, depending on the size of the organisation, it could involve an hour every month or several hours a week.

You don’t need to have an accounting background to be a good Treasurer. An eye for detail certainly helps, together with a basic knowledge of how the organisation works and knowledge of how money flows in and out of an organisation. If you do have an accounting background, you may like to read my previous post Not-for-profits – 6 ways your bookkeeping differs from other organisations.

You will need good communication skills as you will need to attend meetings and explain financial reports to committee members who may or may not share your enthusiasm or knowledge of financial matters.

Financial Reporting
This includes recording all financial transactions of the organisation and preparing financial statements at regular intervals. It also includes budget preparation and keeping an eye on whether groups are spending within their budgets.

Larger organisations may employ a staff member to record transactions, however the Treasurer will need to keep an overall eye on the finances.

Some organisations may use computer software to record transactions & prepare financial reports, however small organisations may use spreadsheets.

Procedures
Written financial procedures need to be reviewed and updated regularly. Anyone else should be able to walk into the role and pick up where you left off. It is also provides a degree of protection for the organisation and its people.

Correct authorisation of transactions is a key issue, as well as having strong internal control procedures in place to prevent theft or fraud. You may need to assist with audits.

Fundraising
You may be asked to prepare funding proposals for grants, with the assistance of other board members.

Risk minimisation
Part of keeping an eye on the finances of the organisation is alerting board members to potential risks such as low funds or future, large expenses.

Taxes and Industry Specific Legislation
The Treasurer should educate themselves on the main legislation that applies to the particular organisation. For example in Australia this could include GST, PAYG withholding and ACNC requirements.

So that is the basics of what you may be asked to do as a Treasurer. Depending on your work background it may be quite a large learning curve for you, however don’t underestimate the satisfaction you can get from devoting your time to a worthwhile cause. It is also a great opportunity to get together with people who share your interests and passions. Don’t forget to add it to your resume and make use of the networking opportunities that being on a committee can bring.

Have you been a Treasurer before? Was it a positive experience for you – please add your comments below.

Not for Profits – 6 ways your bookkeeping differs from other organisations

church

There are many types of organisations out there (one of the reasons I enjoy bookkeeping), and not-for-profits are one type of organisation in particular that require a special approach to their bookkeeping.

Terminology – Terms such as “profit” and “loss” are usually replaced with “surplus” or “deficit”.

Complex budgets – Broken down into many different departments or auxiliaries. Essential for decision-making and helps keep organisational spending on track.

Asset purchase – Often recorded as an expense, with adjustments made at the end of the financial year to transfer the amounts to the correct asset accounts.

Special tax concessions – Available for some registered charities in Australia. For example, income tax exemption.

Cash handling – A lot of trust put in volunteers, who may be handling large amounts of cash. Do you have good internal control procedures in place to reduce the risk of theft and lost money? For some tips on internal controls, refer to my previous tips in Reducing the risk of fraud and error in small business.

Non-Profit Sub-Entities – Treated separately to the rest of the organisation in relation to GST.

Who said bookkeeping is boring? Always something new to learn, particularly if you are a newly appointed Treasurer or Bookkeeper.

Have I missed something important that you have found to be different with not-for-profits? Please join the conversation and add your comments below.

Not-for-Profits – Getting ready for an Audit

charity definitionMany not-for-profit organisations in Australia voluntarily choose to have their books audited, while some are required by the ACNC (Australian Charities and Not-for-Profits Commission) to have this done annually.

Whether you are a bookkeeper or treasurer, here are some tips to help you sail through your next audit:

  • Are all your source documents filed in a way that they are easy to access? For example, invoices, bank statements, timesheets, financial statements, cheque books.
  • Is your Asset Register up to date?
  • Has anything significant occurred since your last audit that needs to be explained to the auditor? For example, a change in accounting procedures.
  • Can you provide proof of asset and liability amounts in your Balance Sheet? For example, the balance of bank accounts.
  • Have you got solid internal control systems in place? For example, a written protocol for cash counters. I shared information on internal controls in my post Reducing the Risk of Fraud and Error in Small Business.

These are some of the things your auditor may focus on when auditing your books. Once you receive your report, be sure to take into consideration any recommendations and ask questions if there is anything that you don’t understand.