Local group treasurers14 July 2009
Keeping good accounts helps your group finances. It's also important to be accountable for what you raise and spend.
Read our tips below, and make use of this template spreadsheet.
Why keep accounts?
To fulfil the terms of the Partnership Agreement all local groups must maintain good financial records for reasons of transparency and good practice.
All members of the group have the right to know how the group's money has been used.
To keep track of money eg, to ensure that you've collected all the subs, or to avoid paying a bill twice. And to know how much you have available.
To help make the best use of your money. Your records will help you work out how much money the group needs next year and then budget accordingly.
To help with fundraising. If you apply for a grant (e.g. the Friends of the Earth Local Groups Support Fund), you'll be asked for accounts as proof that the group is well run and will use the grant properly.
If you're trying to decide whether to run a raffle or have a stall at a local fete then past records will show which raises the most money.
Top Tips
Appoint a treasurer.
Get a bank account. Many banks and building societies have accounts specially designed for local community groups. You might be asked for proof of your identity as a licensed Friends of the Earth local group - contact the Activism Development Team in England or your Network Developer in Wales and Northern Ireland for an authorisation letter.
Make use of our template spreadsheet.
When you receive or pay out money, record it at once and write out a receipt. Keep all receipts together (clipped together, in a file).
Always record the full amount of cash you receive or pay out. For example, if you take in cash from a jumble sale and then use some of it to buy tea and coffee, you should record both the total takings and the monies spent.
Balance the books at the end of the month or quarter.
Use your summaries to create financial reports about the group to help you plan for the future. For example, you know that it costs you £10 a month to hire a meeting room; you are meeting 10 times, so in a year you will need to spend £100 on room hire.
It's a good idea if your financial year coincides with the group membership subscription year.
Annual accounts - the point of balancing the books is to make sure that at the end of the financial year the group's account books and bank account tally.
Report to the group Annual General Meeting (AGM). Friends of the Earth ask that all local groups have an AGM. It's the role of the treasurer to prepare the financial report for the AGM. This should be a written report showing:
- Total amount received, with a breakdown of the receipts (i.e. How much the group received from grants, subs, fundraising etc)
- Total amount paid out, with a breakdown of the payments (how much the group spent on stamps, stationery, etc, and large one-off payments)
- Total amount in the bank.
Tax
Community groups such as Friends of the Earth local groups don't have to pay tax on activities within the group such as collecting subs, small scale fundraising etc. The only tax you'll be liable for is on any interest paid on your bank account.
VAT
Again, local groups don't have to worry too much about VAT as this only comes into play for organisations with annual takings over £68,000 per annum (figures for 2009/2010).
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