Financial Checks and Balances for your Association/Club Basketball Tasmania Financial Checks and Balances for your Association/Club

Presenter Details Cam McCreary Finance Manager – Basketball Tasmania Phone: (03) 63 314 287 Email: cam.mccreary@basketballtas.com.au

Today’s Session Financial Management – Why is this Important? Role of Treasurer and Importance of Role. Cash Flow Management. Budgeting. Banking/Financial Record Keeping. Accounting Systems. Useful Financial Reports. Financial Health Checklist Questionnaire. Financial Action Plan.

Importance of Financial Management Financial management is an integral part of your association/club’s strategic plan. Financial management is more than simple book-keeping. Good financial management will assist the association/club meet its desired objectives and outcomes. Right information, right time, right place, right decision.

The Role of the Treasurer Management of Association/Clubs financial matters Responsible for procedures relating to record keeping, financial transactions, production of financial reports. Maintenance of cash receipt records, invoicing, asset register maintenance, member registration details. Must have a basic understanding of accounting (money in, money out, debits and credits).

Cash Flow Management & Budgeting A budget is an imperative tool to successful cash flow management. Budgeting is the correct allocation of resources to decided programs/direction. Successful budgeting involves: Documenting all assumptions; Board direction; and Impact maximum benefactors.

Budget Highlighted previously, important! Plan to show where money is projected to go, when it is going to be received. Identifies areas for future growth. Key components of basic budgeting: Income; Expenses; Net Position.

Banking and Financial Record Keeping Key Banking Checks (not an exhaustive list): Dual signatories on expense accounts; Board should approve 2 individuals to authorise payments; If using cheques, never sign a blank cheque; and Mark all cheques “not-negotiable”. Record keeping is vital: Maintain indexed files; Maintain invoice files; Maintain Accounts Receivable (debtors) files; and Maintain Accounts Payable (creditor) files.

Financial Accounting Systems Xero has fast become one of the most highly regarded cloud based accounting systems in Australia. This is the system used by Basketball Tasmania and produces efficient and user-friendly reports. MYOB – one of the most frequent programs used by many small businesses (especially in Tasmania). Online arm but not as up-to-date or user-friendly as MYOB. Similar to MYOB, Quickbooks is used by many small businesses. Interface not user-friendly and can confuse individuals with no real understanding of accounting concepts.

Useful Financial Reports The four common financial statements that you may find useful in reporting: Profit and Loss (Income) Statement Balance Sheet. Cash Flow Statement. Budget (previously discussed).

Profit and Loss (Income) Statement Indicates the profit/loss your association is making from activities (how much money are we making?). Highlights areas of overspend and underspend. Key components of profit and loss: Revenue (Income); Cost of Sales (Direct Expenses); Gross Profit Figure; Sundry Income (Other Income); Expenses (Other Expenses); and Net Profit Figure.

Balance Sheet Indicates how much the association owns/owes. Highlights the key financial commitments/obligations of the association. Identifies how much “working capital” the association has. Key components of balance sheet: Assets (current, non-current) Liabilities (current, non-current); Net Assets/(Liabilities); and Owners Equity.

Cash Flow Statement Indicates cash in, cash out. Purely cash accounting, not accrual. Indicates how the association is paying in order to provide services. Key components of cash flow statement: Cash flows from operating activities; Cash flows from investing activities; Cash flows from financing activities; and Net cash inflow/(outflow).

Financial Health Checklist Does the association have cash handling procedures? Is cash receipted, banked, invoiced? Does separation of duties occur? Are signatories current and approved. Are there dual signatories on accounts? Does your association have a treasurer? Does your association have a budget? Does the board review the budget to actuals? Are financial reports prepared in your association? Does your association keep backups of financials? Are you continually monitoring your tax exemption status? Does your association lodge financial reports? Do you have your associations financial reports audited?

Financial Action Plan Please refer to Action Plan handout.

Presenter Details Cam McCreary Finance Manager – Basketball Tasmania Phone: (03) 63 314 287 Email: cam.mccreary@basketballtas.com.au

Thank you for your attendance, any questions?