Finance

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Revision as of 20:50, 27 June 2007

A chapter's Financial structure is divided between the Treasurer who handles the chapter bank account and the finance committees who can request funds for venture expenses. This relationship is not unlike the one between an entrepreneur searching for capital and a bank in need of a financial return.

Money Matters

Managing your chapter's finances can be a trying (boring) experience, but preparation and organization can really be the difference between sucess and failure. Healthy finances will ensure a strong future for your chapter by allowing you to recruit members, run profitable ventures, and fund excellent summer projects. This section will provide for you some basic tools you can utilize to maintain fiscal responsibility and ensure that your chapter remains in good financial standing.

Budget

Principals

The best first step on the path to fiscal responsibility is to develop and maintain a detailed organization budget. It is best to have all members of your executive board work together to develop your budget; that will limit the possibility of missing revenue sources or possible expenditures. It is also good to refer to copies of your past budgets when developing a current or projected budget for your student organization.

When developing your budget, remember to be realistic and conservative. A well-organized budget has two parts: income and expenses. Income could include fundraising revenue, departmental contributions, and any other planned revenue sources. When projecting your income, list all sources and add up all contributions, then subtract 10% of the gross income just in case everything doesn’t come through.

Expenses include any money you plan to spend throughout the course of the year. Project expenses for all events, big and small (a sample event budget can be found in the Event Planning section). Remember to include expenses for national membership dues (if applicable), supplies, promotional materials, travel, and conferences. Once you have developed thorough lists of income and expenses, subtract your total expenses from your total income: that difference is the amount of money you need to raise through additional fundraising or requests for Student Activities Fee monies allocated by Senate, GSA, or JFC.

Using the Budget Template

Managing your Budget

Once your organization has finalized a budget, refer to it often and update it as needed. Your organization will better stay on track toward reaching its goals if it maintains a budget that accurately reflects income and expenses. It is fiscally responsible to make every attempt to stay within your set budget; fiscal responsibility will aid your organization’s future financial planning.

While most organizations use a treasurer or other financial officer to manage financial matters, it is important that more than one person understands the financial operations of the organization. Make sure organization members understand the organization’s financial operations. A lack of understanding could lead to disregard for paying bills and controlling expenditures. If more members understand revenue potential and expenditure constraints, they will be more willing to work within them.

While every member should understand your organization’s budget, only a few people in your organization should be authorized to handle financial transactions or access your account. Maintaining monthly financial reports and documentation could help divert a financial disaster, so your treasurer should keep a record of all deposits and expenses for comparison to the reports provided by Student Activities. An organization should appoint one member to be responsible for tracking the budget and handling most, if not all, financial transactions.

It’s normal for your budget to change and shift throughout the year. If you find that your organization would like to make a purchase or plan an activity that was not budgeted for in the beginning of the year, then your budget will have to be rearranged to compensate for the unexpected cost, or your group will have to find another source of income to cover it. Likewise, if a purchase turns out to be significantly more expensive than predicted, your budget will have to be adjusted to cover this cost: another expense will have to be cut, or additional income will need to be added.

Cash Handeling Procedures

Segregation of duties is an important component of the internal control environment and helps prevent errors and fraud. The ideal department would separate the following functions of the cash handling process:

1.Collecting cash and other payments

• Handling payments and entering transactions into the cash register system
• Preparing manual check listing, manual cash receipts ledger, or preparing multiple-copy receipts.
• Preparing daily cash balancing of cash register or cash drawer.
• Performing reconciliation of credit card receipts.

2.Depositing and recording

• Preparing bank deposit and deposit slip.
• Maintaining accounts receivable records (if applicable).

3.Control activity

• Reviewing daily cash balancing cash register or cash drawer.
• Comparing daily cash balancing report, listing of checks, and other manual reports to bank deposit.
• Comparing cash register report to bank deposit.