Club Financial Planning in Three Simple Steps
Photo Credit: GotCredit
Money makes the world go round and it is also a key performance indicator for successful clubs. The more money you have, the more you can support your volunteers, coaches and programs.
However, I often find that many organisations I work with don’t have a good understanding around how to manage their finances. So this week I have gone back to the basics. As I have discussed with athletic performance, getting the foundational steps right is key to long-term success for our athletes. This is the same for the financial sustainability of our clubs.
So here are the three top documents that every organisation, no matter how small or big should have. Yes it is basic, but it shouldn’t be hard. But I know that the majority of small clubs will be missing at least one of these documents.
1. Have a Budget
One you have done your strategic planning you will have a lot of tasks or operational initiatives that you want to achieve. You will also have the day-to-day operational expenses that need to be paid to keep the club moving.
Just like having a strategic plan, a clearly articulated budget is another important document for any organisation. Not only does it help to keep the organisation financially viable, but it also allows the committee to make good strategic decisions about its future.
Here is a downloadable example of a budget I use for the organisations I work with.
2. Have Financial Delegations
Once your budget is in place, you will likely have different people or subcommittees out doing things for your club. They will often be responsible for managing parts of the budget. Good governance means that they must be provided with guidelines and limits on how that money is spent. This is called a financial delegation.
A financial delegation should form part of the organisation’s financial accountability policy. No matter how small the organisation, a simple financial delegation authority should be used.
Here is a simple financial delegation that is easy to fill in.
3. Make Claiming Expenses Easy
As part of the financial delegation, members of the committee will often go out and buy items for the programs they are running or approve others to incur expenses on behalf of the organisation (for example coaches booking in professional development trips). It is then up to the treasurer or a staff member to try and figure out who needs to be repaid and where the payments are allocated within the budget
I use a simple document to collect these expenses together and ensure that the person holding the financial delegation approves the reimbursement of the expenses. This makes it simple for the person processing the payments and managing the budget.
Download my sample Expense Claim document here.
A Joint Responsibility
All Board/Committee members are responsible for the financial accountability of the organisation. Not just the Treasurer, who is the one responsible for managing the processes. Therefore, having sound financial accounting process, like the three documents above, is a great start.
Reporting back to the Board/Committee each meeting on the financial position of the organisation is another key requirement. With a clear budget, this will make the Treasurer's job a lot easier and enable the Board/Committees to understand the financial position of the organisation with ease.
If there are any other questions you have around effective financial management of your organisation, then please comment below or email me at [email protected]
Thanks for reading
What did you think? Leave your questions in the comments below, and share this article with your friends and colleagues. If you want to work with me, then please get in touch.