It is the Treasurer’s responsibility to prepare the financial reports and keep records of financial transactions. Using various financial reports such as Profit & Loss, Balance Sheet, Budgets and Asset Registers is a good start. Other templates are included here to assist with recording of financial details. You can also check out the guide on a Treasurer’s role and responsibilities here: See also: Damn Good Advice for Treasurers Guide
Financial Reporting & Policies
Profit & Loss
A profit and loss or income statement lists your sales and expenses and is generally recorded on a monthly, quarterly or yearly basis. It tells you how much real profit you’re making or losing. On your profit and loss statement, list all your Income and expense items with the dollar amount for the next three years. For each year list the items and total the figures under the headings Sales (Income) and Expenses.
A balance sheet is a snapshot of your business on a particular date. It lists all of your business’ assets and liabilities and works out your net assets. A balance sheet can also help you work out your working capital (money needed to fund day-to-day operations) and business liquidity (how quickly you are able to pay your current debts), which can give you a good indication of the financial health of your community group.
A budget is an important tool to help you understand your community group’s financial position now and document your financial projections for the future. A budget can help your community group meet its financial goals. It’ll make sure you’re not spending too much money and show you if there’s extra money coming into the business that could be used for community group growth activities.
Sample Tax Invoice
Sample Receipt Template
Sometimes another organisation will ask you to produce a Receipt for payment. We have provided a simple template here for you to use.
Income and Expenses
Each month an organisation should record Income and Expenses so that they can see the money going in and out of the organisation easily. This should at least record items on the Bank Statement, as well as other purchases and funds received.
An asset register allows you to keep track of your assets and provides a fair estimate of their worth. It meets your taxation, statutory and sale-of-business obligations. It is also an appropriate place to record serial numbers, make, model, etc. Your organisation is required to keep records of purchases and disposals of assets for the auditing of accounts.
It is important for Community Groups to keep copies of their bank statements on paper copy file. It is good practice to also present the bank statements with details of expenditure at each Management Committee meeting.
National Standard Chart of Accounts for not for profits
The National Standard Chart of Accounts (NSCOA) is a free data entry tool and data dictionary for charities and other not-for-profit organisations. All Australian governments (Commonwealth, state and territory) have agreed to accept NSCOA when requesting information from not-for-profits. While NSCOA is not compulsory, there are benefits in using it.
The STARservice – Development Program has been designed for use by community organisations of all sizes. The program will be valuable for your organisation whether you believe your organisation is already a STARservice or has some work to do. If you are a community organisation looking to develop but are not ready or required to undertake a quality accreditation program, the STARservice Development Program was created specifically for you. STARservice’s will also be recognised by the government and other organisations that value the role that well-run organisations can play in our community.
The Australian Service Excellence Standards (ASES) program is your community organisation’s road map to excellence. This step-by-step program is specifically designed to develop the capacity of community organisations to strive towards continuous improvement in quality service delivery. Organisations complete self-assessments and an external assessment to achieve this internationally recognised accreditation that lasts for three years. Accreditation benefits consumers, staff, board members, managers and funding bodies through greater public confidence, improved efficiencies and work processes, access to more funding opportunities and a more stimulating workplace culture for staff who feel more empowered, involved and satisfied. ASES is now a fully accredited program under ISQua (International Society for Quality in Health and Social Care) and is available to organisations throughout Australia.
Timely Auditing of community organisations is important to gain access to further funding and also for transparency of expenditure of the community organisations expenditure.
Institute of Company Directors – Looking for an excellent auditor? Check out this link: https://www.communitydirectors.com.au/icda/auditors/