Managing Your Group's Finances
There are a number of things to consider when it comes to organizing the finances of your community group. It doesn’t need to be complicated but you do need to be clear on what's required.
If you’re a registered charity, you need to comply with the accounting rules for charities, which can be found on their website www.charity-commission.gov.uk .
When you’ve set up your bank account, you need to allocate two people to sign cheques. Make sure you keep track of everything you’ve bought, with receipts, and keep a petty cash book. Legally, you must keep accounting records for 6 years, so keep them safe!
Who is responsible?
It’s not soley the Treasurer who manages your finances. Everyone in your group needs to have an idea of the basic budget of your group, so they know what they are working with. It’s the role of the Treasurer to let everyone know what this budget is, as well as provide a financial report to members every 3 months. This will state expendetures, future expendetures, and copies of bank statements. If you are a large group, you may choose to set up a financial committee within your group, to work with the Treasurer.
If you are a charity, you need to keep your records, and produce annual accounts available to the public.
The main criteria for what your financial reports should provide are:
- A complete record of transactions and when they have taken place
- Who money has been paid to, and where incoming money has come from
- Totals for an accounting period
How often should the books be updated?
You need to do this as regularly as you can to stay organised! If you’re a small voluntary organisation you should:
Update your account book, bank money and pay bills WEEKLY.
Add up your account book and agree with the statement from the bank, add up the petty cash and check it adds up with the petty cash book MONTHLY.
Make the committee aware of your financial position and performance QUARTERLY.
It might be difficult for you to decide whether to register as a charity or not. Here are some advantages and disadvantages that come with being a charity:-
- Sometimes grants and funding becomes more available
- Some trusts will only give funding to registered charities
- You are eligble for some VAT relief on certain purchases
- You will be regulated by the Charity Commission
- You cannot pay any of your members
Some useful websites to help you along with financial dealings are:
For more information read our full guide to Managing Your Group's Finances.