Helping charities and voluntary groups set-up account systems and manage finances has great rewards. Being able to help those to then help others is so evident in these circumstances.
Often budgets are tight and resources limited, and therefore any kind of valuable input can be truly appreciated. And often it doesn't take too much to maintain going forward, once you have the right system and procedures in place. Then you can basically free up others to then get on with what they need to do.
Top Financial Issues to Consider
Therefore here are top tips to consider, whether you're a trustee or leader directly involved, a volunteer becoming more involved with administration and financial matters, or an external advisor helping out.
These aren't exhaustive at all, and only a quick overview. This is deliberate in order to help you start seeing the kind of issues you need to consider and not be tunnel-visioned; you can then delve into the detail as and when required.
1. A Basic Cash Policy
You'll probably need a form of policy on how you deal with cash for the organisation, particularly actual cash that could be potentially misused by people. Not only is the value of the money at stake, but people's own safety managing it as well.
You'll find a lot of standard policies around, but they will need tailoring to the actual circumstances, for example talking it through with the main managers and risk assessors.
Then have a final version ready to circulate to people, ideally dated so it can be easy to then spot if newer updates are needed in the future.
And as an aside, make sure this is aligned with any other important organisational policies and legal documents, for example the trust deed for charities.
2. Considering Data Protection
With money and finances often comes people's personal data, whether that's bank and credit-card details, or additional contact and gift-aid details as well.
This may also be across different systems and packages that all need to be looked into and see how they all link to each other.
Therefore consider the information around finances with the data-protection policy as to how it is stored, managed, and deleted in the future.
3. Basic Invoices and Receipts
These of course are the bread-and-butter for each penny spent and received, and are important for the books. Within business they're par for the course, but in the voluntary sector not so clear.
Individuals may forget or not understand what’s needed, therefore spell this out in terms of what's needed, who to hand them to, whether digital or paper copies are needed, and that all are important to communicate.
4. Checking People Out
Other checks such as DBS, references and validation, and identity checks, can still be applicable for those involved with finances, as they're in a position of trust and authority.
So even someone just helping to cash-up at the end of an event may need these types of checks, with particular emphasis on any financial issues.
5. Multiple People
As a rule of thumb, don't let people be alone with money.
This is in a literal sense, so when counting up cash, doing it in pairs for example, and making sure there is no outside connection, for example married couples.
This can also work more remotely, so other signatories for cheques and online access and authority for banking transactions.
6. Keeping Safe
Also linked with data protection above, although more on literally keeping financial things safe and sound. So whether that's cash being taken, bank statements and documents, or credit cards and machine.
Make sure they’re locked out of view, with authorised people being able to access, check, and move these.
Also, remember this counts for people's own finances and items, for example how they store any personal handbags or items whilst on the premises to reduce the risk of these being taken by others.
As parts of any general organisational policy you can ensure infidelity cover for loss of goods and money, particularly important for when you're holding cash and actual monies and covering this being stolen.
Also, Directors & Officers cover will generally cover any individuals within their capacities such as Directors and trustees.
8. External Accountants
We’re not just saying this because of who we are, but as a genuine point to consider. There will be a size and nature of the organisation’s accounts that will require such input anyway through, say, an external audit, but from experience even bringing in an external and reputable accountant before then can help ensure that finances are being correctly managed.
Even if this is just a final sanity-check of things, this can go a long way.
Also, on the subject of accounts, remember to have these available for people to see if required with additional helpful breakdowns and summaries. Entities like charities need these anyway and will be available to the public online, but others will benefit as well with this degree of transparency.
9. Gift Aid
For registered charities this is a must to look into, where individual donations from those who pay personal tax means you can reclaim this back to the charity's benefit.
A serious source of additional income, and therefore careful planning is needed to get the correct information from people and process with HMRC.
10. Ways to Donate
On the subject of donations, it's worth thinking through how you practically do and manage this. It needs to be both compliant but easily usable by people.
If you're taking cash or cheques from people, the safe way of noting this alongside any gift aid requirements is important.
If more online banking and payments, then make sure details are easily received, payments can be linked to actual people if needed, and just watch out for any external websites dealing with these and what fees they take for the service.
11. Points of Contact
It sound obvious, but just establishing and communicating these is important to know who needs to contact who for what purpose.
This may need other layers of contacts as well, for example through a complaints procedure, lone worker contacts, and volunteers having a clear point of contact for accounting issues.
This needs a clear policy on what is and is not allowed, and how this is processed. So look at what items are allowed, what levels are required before external approval is needed, and practically what invoices are kept and communicated.
13. Petty Cash
It's like marmite, you either love or hate this principle of having a locked-box of cash that people can use for small items and then invoices being kept to support this.
On one side it can be very practical from a user’s perspective, but from an accounting perspective people prefer just the straight payment of invoices.
If you do have it, then think through how it is done successfully.
14. Bank Accounts & Processes
Make sure you have just the right bank accounts set up that can handle what the voluntary orgnaisation needs.
So even the number of accounts is helpful, maybe just one current one and one savings, particularly for, say, charities who may need to have set-aside reserves and savings. Although it's maybe good to have more than one, don't overcomplicate with more than what's actually needed.
Then see what services the bank can provide, right from processing payments, to fees and costs, to customer service. Try and go through with a business manager, as although this isn't a mainstream business interest it will still need business facilities from a banking perspective.
Also, if you take a lots of cash just check that they will accept these being deposited at the local branch, and what cash-bags and procedures are needed for this.
15. Handling Payments
Actual processing of payments to people and receiving income from people is of course key, and the right person is needed, whether a formal treasurer or book keeper. However, often it does all lie with one person, but make sure others are involved at least from a compliance perspective even if they're not doing the main day-to-day duties.
So maybe there is a second signatory on cheques, or multiple people have online access to the accounts.
Helping Others Then Help Others
Whatever capacity you’re in with a charity of voluntary group, these above factors are the sort of things you need to consider in order to help firm-up the finances and accounting procedures.
Remember that you're not there to do this for the sake of it, and of course there will be separate advisors to correctly set-up individual aspects, but these will certainly help you focus in on the sort of overall issue to bear in mind.