Depending on the type of computer program, the club treasurer will need the following:
A cheque account provides a record of payment through the cheque butt. It is essential that cheque butts are completed at the time of drawing a cheque and to write the cheque numbers of the cheque used on the creditor's invoice when payment is made.
It is a good idea to have at least three members with the authority to sign cheques, with individual cheques requiring any two authorised signatures. Never sign blank cheques in advance, or without an accompanying bill or docket from the supplier, and make sure the goods have been received prior to writing the cheque.
Operate in tandem with a cheque account which enables interest to be accumulated at higher rates when there are no bills to pay. Pay all club bills out of the cheque account, as all expenditure will be recorded on the account statement. The bank can be requested to forward statements weekly, fortnightly, monthly or quarterly depending on the average number of transactions the club has.
The cash book is used to record all the club's receipts and payments on a daily basis. At the end of each month, check the figures recorded in the cash book against the bank statements. It is also a good practice to summarise what the club owes people (the club's creditors) and what money other people owe the club (the club's debtors).
To determine the cash balance, total the receipts and deduct payments. Other items that will alter the cash balance are bank interest and charges, unpresented cheques, dishonoured cheques, and direct credits or debits from other accounts. The opening cash book balance for each month is the closing balance from the previous month. Where only one cash book is used, record receipts in the front of the cash book and payments in the back.
Record details of receipts in the cash book columns drawn up with the types of income expected. These are often the same as those identified in the income side of the club's budget.
Receipts are usually entered in three places depending on the amount of detail wanted and the type of cash book used. Receipts are entered in the amount column, under its income type, and in the banked column when it is banked. Often the banked figure will be an accumulation of all money received since the banking was last carried out.
Listing individual amounts by banking date gives the opportunity for cross-checking to be carried out.
Bank all incoming cash and cheques promptly. It is unwise to use money without it first being banked as it may become impossible for the treasurer to keep track of transactions on.
It is also essential that all cash and cheques received be banked without any deductions being made. Tally all receipts at the end of each month. Monthly totals can be accumulated to give a record of receipts for the year to date. In some cases, quarterly reports may be required. When this happens, it is more efficient to calculate cumulative figures month by month for each quarter rather than doing it for the entire year.
Receipt entries in the cash book may look like this:
When receipting cash or cheques, make sure that correct dates and amounts are entered.
Record details of payments drawn up in the columns with the types of payments expected. These are often the same as those identified in the expenditure side of the club's budget.
Every time a cheque is issued the details should be entered in the amount column. The amount column will operate as an indicator of total club expenditure. Then write the amount in the appropriate expenditure column such as rent. This way, the total amount spent on rent during the year can be totalled.
At the end of each month the columns should be tallied for presentation to the club committee. At this stage, comparisons can be made against the budget to see whether expenditure is proceeding as planned.
All accounts received are required to be paid strictly according to their terms, usually between seven and 30 days of receiving an invoice or claim from a supplier. It is usually the club treasurer's responsibility to prepare cheques for approval and signing at club meetings.
Although the treasurer has the power to make payments between meetings, it is a good practice to have any such payments ratified at the next meeting. In general, all payments will be for budgeted items and can therefore be paid subject to ratification.
The management committee minutes should record the authorisation for major expenditure. Prompt payment will generally ensure the good will of tradespeople. Prompt payment of out of pocket expenses of volunteers also generates good will within the club.
Payment entries in the cash book may look like this:
ABC Real Estate
Whenever you make a cash or cheque payment, write the details in the payments section of the cash book, usually found at the back.
Arrange monthly account statements to arrive just prior to the monthly club meeting. Check the statement against the cash book to ensure they are the same. Remember that there are items that may slightly alter the bank balance such as interest and charges, unpresented cheques, dishonoured cheques, and direct credits or debits from other accounts.
A copy of the monthly statement is usually made available to the club's auditor during the audit.
The bank statement shows all movements of funds in and out of an account. To obtain a clearer picture of the club's financial position the cash book balance is reconciled against the bank statement.
Summarising what the club owes and is owed at the end of each month helps provide a clearer picture of the club's financial position. Knowing the total amount of creditors and debtors also indicates the club's likely cash flow for the next month.
Creditors are people or organisations that the club owes money to, while debtors are people or organisations that owe the club money. They are usually associated with an invoice issued by the club in respect of goods or a service such as membership subs.
A creditor’s summary might look like this:
Creditors (accounts payable)
Debtors, or accounts receivable, look similar, except that the table would have a column for the relevant invoice number issued by the club.
Petty Cash facilities should exist for those small amounts paid in cash. A cheque is drawn on the club account for a small amount and all expenditure from this is recorded and receipts retained. Petty cash expenditure should be recorded in a petty cash book, not the club cash book. Combined petty cash vouchers and register type books can be purchased from a local newsagency.
Items bought out of petty cash are for small amounts (less than say $20.00). Items purchased on petty cash may include milk, pens, bus travel, nails, etc. Clubs normally carry a petty cash float to handle these payments. It is best to calculate how much cash should be kept on hand and kept in a safe place. It is advisable to include the float in your club's theft insurance policy.
Petty cash can be issued in exchange for a receipt as a means of reimbursing club members who have used their own money to purchase small items.
The petty cash float should be reconciled regularly by adding all the remaining cash and the paid petty cash vouchers together to arrive at the petty cash float total. Discrepancies should be brought to the attention of the President. Once reconciled, reimburse the float by preparing a cheque to "petty cash" for the vouchers paid.