1. Early Years Team “ Looking After the Finances ” Important things that every Voluntary Management Committee etc. should know about

2. Early Years Team Exercise – “ Little Rascals ” Playgroup

3. Early Years Team Exercise – “ Little Rascals ” Playgroup  It ’ s 1 st December.  The previous Treasurer left without a full handover – you ’ ve hurriedly been asked to step in!  You do have the records and some financial information, though  The Committee ask you: “ Can the Playgroup get through to end of the Financial Year (31 st March)? ”  There ’ s only one way to find out... So what do you need to do?  PREPARE A CASH FLOW FORECAST

4. Early Years Team Late Payment and Fee Arrears  Don ’ t let it happen: Your Setting ’ s policy: “ Sorry - It ’ s simply not allowed! ”  ALWAYS Payment ‘ In Advance ’, and take Deposits if possible  Monitor - and ACT PROMPTLY  Fee Arrears is an issue for the Staff as well as the Committee (ultimately, no Fee Income = no money for Wages = no Job!)  Defined Repayment Programme – realistic payback over a realistic Timescale  What happens next?  Tax Credits can help with affordability  Don ’ t let THEIR problem become YOUR problem

5. Early Years Team Taking Precautions  BANK ACCOUNT  Always two to sign (from a Panel of 3-4)  Update the Mandate every time someone moves on  Reconcile the Statements to your own Records  PETTY CASH  Use a ‘ Float ’ system, and balance it regularly  Treasurer to ‘ spot-check ’ from time to time  Who is allowed access? (Convenience versus Security)  Never use Fees money for Petty Cash  EQUIPMENT  Is there an Inventory of major equipment?  Is Insurance adequate?  RECORDS  What would happen if your Computer was stolen or damaged?

6. Early Years Team Sustainability What do we mean by ‘ Sustainability ’ ?  The Setting will still be around for the foreseeable future  It will maintain an acceptable level of Quality, in its Care and in its Staff  Management will identify and react to potential challenges for sustainability before they start to impact  Effective sourcing, management and utilisation of Resources will therefore be a critical influence on Provider ’ s ability to survive and prosper.  Main income stream will (in almost all cases) need to come from ‘ Fee Generation ’  The Setting will contribute towards regeneration and job creation

7. Early Years Team 10 Ways to Become & Stay Sustainable (1) 1.Build your Reserves – over time, aim for 3 months ’ cover of Operating Expenses & Staff Costs 2.Monitor your Occupancy – and do something about it if things start to dip 3.Set realistic Fees – know your break-even point, but remember, just ‘ breaking-even ’ will not be not enough 4.Don ’ t let Fee Arrears build up – but if they arise, DO SOMETHING QUICKLY 5.Protect yourselves with simple precautions against Fraud and Theft

8. Early Years Team 10 Ways to Become & Stay Sustainable (2) 6.Committee should insist on regular Management Information – and then USE IT! 7.Learn about how Tax Credits work – and help Parents to apply, then they can better afford your Fees 8.Get Training and Support for your Committee: From the Early Years Team From Community Accounting Plus 9.Talk to your Supervisor and Staff about these issues - they should have a keen interest in sustainability too. After all, it pays their wages! 10.Plan Ahead – sadly, almost everything takes longer, or is more complicated, than you think!

9. Early Years Team Reserves What are they? Money that isn ’ t yet committed to a specific purpose within this year ’ s Business Plan, but is being held back, either for a long-term project or ‘ just in case ’. Why do we need them? Recognition of financial management problems can be slow. Corrective action may take a while to work. So there may be a need to ‘ buy time ’ to tide you over while you address any unforeseen challenges. How much should we aim for? Ideally, Reserves equivalent to about 3 months worth of normal Operating Expenses, including Staff Costs, will be one of the main measures of a Setting ’ s stability and success. But we ’ re a ‘ Not For Profit ’ Setting! Don ’ t get confused between ‘ Profit ’ and ‘ Surplus ’. If it ’ s staying within the Setting, then as long as the amount is reasonable, making a modest Surplus to build-up Reserves is ‘ good practice ’.

10. Early Years Team Management Information Report  The final trigger for most business failures is that they run out of cash – and time  Proper monitoring by your Committee can give you time to prevent that happening  You NEED a regular Management Information Report  Three Key Areas to focus on:  THE CASH: Where has the money gone so far, and where will it be going, compared to your Plan?  THE OCCUPANCY: How much Childcare are you actually managing to sell – and what are the implications?  THE FEE ARREARS: Are you actually getting paid what ’ s owed you for doing all this work?

11. Early Years Team  Community Accounting Plus exists to enable good management in voluntary organisations.  CA Plus believe that a well-managed organisation is more likely to deliver a more effective service to the people it exists to serve. Their job is to help them.  C A Plus is a membership-based organisation, and a registered Charity. Full membership is open to any voluntary organisation  Many services are free of charge to the groups, but the funding is fairly complex and the costs of services depend on a number of factors.

12. Early Years Team Accountancy Training Annual Accounts Book-keeping Payroll Services Advice about Employment Training Courses Services include: Contact Details: Community Accounting Plus 1st Floor, 32-36 Pelham Street Nottingham NG1 2EG Telephone: 0115 947 0839 Fax: 0115 958 8779 Email: caplus@communityaccounting.co.u kcaplus@communityaccounting.co.u k