Treasurers Guide Part 2

Receipts
All the money received by your organisation must be recorded no matter how small the amount may be – ‘accountability’ is all important. If someone gives you £1 for the cause – write it down in your account book.

Use as many accounts as you think fit to record the receipts of the organisation. Attention to detail early on will prove invaluable as a management tool later. A simple example would be a charity that advertises and also attracts income by direct mail. Using an account to record the receipts from each source will tell you which one is more efficient (or which one needs improvement).

You can group your accounts under general headings. An example set of account groups and accounts could include:

• donations
  • 1. from individuals
  • 2. from business
• subscriptions
  • 3. annual
  • 4. lifetime
• merchandise
  • 5. direct mail
  • 6. charity shops
• others
  • 7. refunds
  • 8. grants

Always include the name of the person or organisation which gave you money as well as the date. It is also useful to note whether it was in the form of a cheque/cash or other source (eg. a direct transfer).

Payments
All payments must be written down – even if it was for a pint of milk. If you fail to write everything down, not only will your petty cash be short, others may wonder if anything else is amiss regarding your book-keeping.

It is for this reason that a receipt must be produced before you allow any money to be paid.

If someone buys a small item and forgets to get a receipt, a petty cash slip is fine – provided their name is written on it and they sign it.

Use as many accounts as you like to record payments, but keep in mind the maxim ’simplest is best’. Postage is a good example: you may be tempted to breakdown the costs into ‘recorded’, ‘registered’, ‘1st class stamps’ etc. Unless this kind of detail can be used as a management tool (eg. to discover if a 1st class mail shot worked better than a 2nd class one) don’t do it – it only complicates things and results in extra work not just for you, but also for an auditor should one be required.

Try to keep each group of payment accounts relevant to the requirements of your organisation. For instance, if it has a permanent office, it is worth keeping payments relating to the office in a group of their own (the committee can then keep track of whether the office is ‘paying’ for itself).

If your organisation holds regular events, it may be worth noting in your accounts which payments belong to which event (so you can later decide which events prove the most lucrative).

Treasurers Guide part 3 here…