This article was compiled by FMC Financial Controller, Daniel Parkinson. If you or your club wants to add to this resource, or assist us building resources about any topic for the Outdoor Community, then drop us a line!
Although there is some cost to accounting software, it’s a fantastic tool that makes a treasurer’s role much easier.
A club should have a separate bank account that requires two signatories to authorise payments. Usually, these signatories would be the treasurer and president. A third or fourth signatory is useful as a backup in case one of the signatories is not available.
Ensure that bank access is removed for any signatory that is no longer on the club’s committee.
Authority Limits for Spending
A club should also have a policy on expense authority limits. What level of spending is appropriate for a club president to approve, and what needs to be approved by the club’s committee, or at an AGM?
Club Funds and Investment
Consideration should be given to how best to use club funds in the bank. A club may have savings or bequests, and if these are significant, then a club should consider investing this. Depending on the rates of return, the club’s cashflow requirements and risk appetite, then term deposits and managed funds with a bank or other financial institution can provide the club with a return on its funds at a suitable risk level. Over time, this can provide a significant source of additional revenue, and/ or grow the club’s funds considerably.
It’s important to allocate any return on bequest funds that are invested to that bequest, and conversely keep a record of bequest funds that are spent and allocate this against the bequest.
Engaging an Accountant or Auditor
Employing an accountant to perform a club’s treasurer role is likely to be a significant expense and one that is beyond the resources of a club. So ideally the club treasurer has some sort of accounting or bookkeeping background.
An audit of the club’s accounts is usually not necessary- there is no requirement for an Incorporated Society to have an audit or review of its financial statements. Some clubs may have a constitution that requires this, however.
A club may still wish to have an accountant prepare annual financial statements, or to review the financial statements, to provide additional comfort, and a club may be fortunate enough to find an accountant who is prepared to do this on a pro-bono basis, or for a significantly discounted fee.
Keeping an eye on the bottom line
If a club is regularly making losses and eating away at its reserves, then this is obviously not a sustainable situation, and long-term options need to be considered. Do club fees need to be increased? Are there other sources of revenue available e.g., grants? Can savings be made with expenses? If a club has assets such as lodges or huts, then the funding of future maintenance on these also needs to be considered.
As a general rule, clubs are exempt from income tax, and if revenue is less than $60,000 per year, then there is no requirement to be registered for GST.