By using a simple cash book, the treasurer can reconcile the club's accounts and draw up lists of creditors and debtors at the end of each month. This simple form of reporting contains the most basic information that the club management committee requires to assist in their decisions.
The management committee may require more detailed information about trends in the club's income and expenditure patterns. In this case the treasurer will draw up a report relating monthly figures to the budget.
A standard monthly report sheet can be devised, especially if a computer with spread sheet software is available.
This type of report provides far more detailed information than the basic monthly report. It enables the club management committee to track income and expenditure and make decisions based on the budgeted targets for the year. This report is closely related to the cash book and annual budget and presenting this type of report will take little time once the cash book and budget are established.
The annually budgeted figure for each item of income and expenditure will remain unchanged throughout the year. The figures that change will be those tallied at the end of each month and added to the year to date column, which come directly from the cash book.
For a big club, the monthly financial report comes from the reconciliation statement. It gives a more complete picture of the club's financial health. Provisions set aside cover amounts being saved to cover anticipated or known costs.
A Statement of Income and Expenditure and a Statement of Assets and Liabilities are the principal components of the Annual Financial Report to be adopted by members at the Annual General Meeting. These statements show the profitability and financial position as well as the net worth of the club after the year's activities. The report is based on the receipts and the payments which have been summarised in the cash books.
If the club is incorporated under State legislation, the club is required to lodge a return (copy of the annual accounts) at the appropriate State authority, usually the State Corporate Affairs Office. These accounts are to be accompanied by a certificate stating that the accounts have been approved by the members at the AGM on a particular date. This must be signed by an officer of the club.
Also called the Annual Profit and Loss Statement
This statement shows how much money the club has made or lost during the year. The statement is based on figures recorded in the cash book and is normally prepared by the club's treasurer and verified by the auditor.
Also called the Annual Balance Sheet
A statement of assets and liabilities is a statement of what the club owns and what it owes, the difference between the two revealing or being the "net worth" or "accumulated funds" of the club.
It is not worth the trouble of preparing reports only to ignore their implications. If the income or expenditure figures are far removed from those estimated in the budget, it is essential to find out why and take appropriate action to fix the situation. It is important to understand where things are going wrong and why.
Detailed and frequent financial reporting will identify problems early, and definitely improve the club's overall financial effectiveness.