Finance
From Ni Wiki
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. In this article we will explain some basic finacial controls and outline how to use the chapter accounting documents.
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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 chapter budget. At the beginning of the year the executive committee should outline what ventures it plans on doing and create a budget for each using the chapter accouting documents. It is also good to refer to copies of your past budgets when developing a current or projected budget for your chapter.
When developing your budgets, remember to be realistic and conservative. A well-organized budget has two parts: income and expenses. Income could include ticket sales, plate sales, sponsor donations, 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. Your primary expenses will be related to ventures. So for Hunger Lunch you should budget expenses for food, supplies such as plates, utinsels, and promotional materials among other things.
Using the Budget Template
Budget templates for the chapter level and individual ventures can be found on your chapter's google docs page. If you do not have a google docs page you can set one up with any gmail account. There are four basic budget templates; one for Hunger Lunch, one for Hold 'em for Hunger, one designed for any event, and one for the chapter level that incoporates general expenses & income as well as project expenses. With each template you can create a budget and then keep track of expenses and income as they come in.
Hunger Lunch The Hunger Lunch accounting document gives you the ability to plan out yearly income and expenses based on variables such as price per lunch, number of lunches, and cost of food and supplies among other things. On the front page you'll find the projected earnings calculator as well as the total income and total expenses aggregator. Feeding into this aggregator is the running tally on the next page. As money comes in and out you can input each item under revenue or expenses. Each entry can be itemized and color coded based on its respective category (such as "Plate Sales" or "Food Expense"). You can also keep track of current total inflows and outflows under the "To Date" column. Using the =, select cell command you can merge aggregate expenses & revenue from the Running Tally sheet onto the front page under the Total Expenses & Total Income sections. Once aggregated, you can divide the totals by the number of lunches held to find out how much you are averaging per lunch. As the semester goes along you can use the Actual Earnings (Projected) field see how well your estimated earnings are keeping up with what you budgeted for. On the last page you'll find a total profit loss statement with a graph showing how you did over the course of the year.
Hold 'em for Hunger The Hold 'em for Hunger accounting template has the same budgeting and income & expenses tracking functionality as the Hunger Lunch document with a few expanded features. Expenses and Income have been split between pages and there is an additional sheet to list prizes. Expenses are divided pretty cleanly along committee lines with separate categories for Sponsorship, Sales & Marketing, Food & Prizes, and Event Planning. Subcategories divide up the larger categories into fields such as "Brochure Printing", "Fliers", and "T-shirts" giving you the option of added granularity. The Income sheet has similar Hunger Lunch
Managing your Budget
Once your chapter has finalized a budget, refer to it often and update it as needed. Your chapter 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.
