The position of Treasurer is the key to keeping the organisation's finances in order and is filled along with other board or management committee positions at your annual general meeting.

The position requires time, dedication and financial expertise.

Most small non-profit organisations, such as self-help groups, local amateur dramatic societies and the local tennis club do not employ staff. In these associations, the Treasurer is the person who has to do the actual work - organise bank accounts, deposit cash and cheques, pay the bills, keep the books straight, draw up a budget, and regularly keep track of the outgoings and incomings through the year so that the organisation knows how well they are keeping to budget.

In larger organisations with a professional staff, the Treasurer is usually supported by a Finance Committee and provides a link between the staff and the Board on financial matters. The Treasurer maintains a watching brief on the monthly accounts ensuring appropriate procedures are in place to keep things running smoothly and that there are no surprises.

Most importantly the Treasurer works with the Chair, other Board members, and the staff to draw up the annual budget, which is then approved by the Board

The Treasurer will need to be able to prepare reports for the members, the management and the government that will show both the current situation and the possibilities for the future. He or she will need to advise the Board in their decision-making, for example alerting them of potential tax implications of particular activities.

Before drawing up a duty statement for your Treasurer, ask yourself the following:

1. Is our organisation incorporated?

   Should it be?

   There's a certain amount of work involved in becoming an incorporated association, but it does make the business of setting up a bank account and handling cheques easier and more straightforward. For further information on how to become an Incorporated Association in your state/territory.

   Incorporation in Tasmania
   Incorporation in Western Australia
   Incorporation in the Northern Territory
   Incorporation in Queensland
   Incorporation in New South Wales
   Incorporation in the ACT
   Incorporation in the Victoria
   Incorporation in South Australia

2. Does your organisation have public liability insurance covering its officebearers? Should it?

   The risk of anything going wrong is very small, but it's not zero; and if anything does go wrong, it can get very messy indeed. You will sleep a little easier if you have insurance.

   Once you've got that sorted out, look at your bookkeeping and banking arrangements.

Bookkeeping

The Treasurer needs to make sure that;

1. all transactions are recorded
2. information about the organisation's financial position can be readily extracted from the records as reports for management
3. payments are approved by the people who are actually authorised to approve them.

In a small organisation the Treasurer will probably carry out the tasks herself but in a larger organisation, the Treasurer will be responsible for making sure the right procedures are in place for these things to happen.

A financial procedures manual is important for all organisations. In a larger organisation the Treasurer should regularly consult with the CEO to ensure that the procedures are up-to-date, adequate, and readily lead to accountability.

If you're in a middle-sized organisation - large enough to need someone with specialist accounting skills, but not big enough to afford one full-time - consider bringing in an accountant once a month (or every two months) to check your work.

This will cost more than $ 100 a session, but it will ensure that financial dealings are on track, and will give you an external check on your procedures.

If you're a really small organisation, the Treasurer is also responsible for keeping the accounts in the sense of not losing them. Keep a separate file folder for statements and cheque stubs, invoices and receipts, deposit slips and cash receipts and financial reports. A separate set of files should be kept for each year. Generally a club's records should be kept for no less than seven years. The records should be kept in a place where they will not be damaged. If you're a large organisation, consider a fireproof safe or a safe deposit box.

Banking

You will certainly need a cheque account. If there is any significant amount of money that isn't going to be needed for a few months you could look at an investment account. It is the responsibility of the Treasurer to weigh up all the factors - return, risk, convenience - and settle on the most appropriate arrangements. Look over the pamphlets, draw up questions, check service charges and shop around for the best deal.

Don't forget that word "risk". Higher interest rates are not everything. The collapse of the Pyramid building society was a long time ago now, and people may already be forgetting that sometimes places that pay higher interest than ordinary banks need closer scrutiny than ordinary banks.

If your organisation has large endowments - money that needs to be invested, rather than just administered - you will have other decisions to make, but you will probably be able to afford expert advice from a portfolio manager.

Financial management

It is the Treasurer's responsibility to prepare the annual budget for the approval of the Board or Committee of Management. Budgeting is covered here. The Treasurer has to be able to estimate future probabilities based on past experience, to anticipate the effect of the unexpected, and to explain all this to people who may not themselves be financially savvy.

The budget is made up of all the activities and programs your organisation is hoping to undertake in the next twelve months expressed in terms of money. Writing the budget cannot be done by the Treasurer alone, it must be prepared in consultation with the staff, the funders and fundraisers, and with the Chairman and the Board

In a larger organisation the draft budget will be drawn up by the CEO. The Treasurer will still have to sell the budget to the Board, and therefore needs to be across all programs and their financial implications. The Treasurer then needs to ensure that all board recommendations are included in the final budget.

Once budget is approved, the Treasurer, on behalf of the Board, is responsible for keeping track of how closely actual figures match budget expectations. Each month draw up a table showing budgeted expenditure and income under each heading for the year to date, the actual expenditure under each heading, and the difference between the two. This will flag many approaching problems.

If you have accounting software it will produce these reports automatically. In a smaller organisation the Treasurer should keep accounting records in a spreadsheet like Excel.

Working with the auditor

The format the Auditor uses is different from the month-by-month management accounts, involving things like depreciation and asset balances, and will need extra material.

The auditor will ask the Treasurer to provide the following:

Assets

• Cash in bank
• Accounts Receivable - Who owes you money, how much, when it was due?
• Property and Equipment (Fixed Assets) - When acquired, how much you paid, how long they are expected to last, how much they are depreciated each year, and how much has been depreciated to date?

Liabilities

• Payables - To whom do you owe money, and how much do you owe to each? Get out copies of invoices or loan agreements.

Revenue

• Grants and Contributions- produce grant details, grant period, grant amount, when received, restrictions, and copies of the grant letters and grant applications.
• Donated services and materials-You may be required to place a dollar value on contributions of certain services and materials. Prepare a list of these donations to discuss with your auditor.
• Special events and benefits (income and expenses)
• Documentation--such as contracts and invoices, names and addresses, registrations, etc. for fees from memberships, tuition, performances, and other services.
• Inventory--If you sell tee-shirts, books, or other products, keep a record of sales throughout the year so that beginning inventory can be reconciled with inventory at the end of the year.

The more material you can prepare for the Auditor in advance, the smaller your bill will be.
If you can get a qualified person to serve as honorary auditor, so much the better. If you're paying for it, then ask if the auditor has any experience in non-profit organisations. Ask in advance about fees, too.

Board reporting

The most difficult aspect of being a Treasurer is that cost cutting is more likely than income expansion. If you predict that you will have to do more with less staff, you can ensure that comes about. If you predict that there will be more donations, you cannot necessarily make that come true.

Use your best judgment (that's easy to say, of course). Will there have to be economies? Are there difficult decisions to be taken? Will you have to cut back on services? Will some of the staff need to have their hours cut, or be laid off? All these decisions are hard, but they will all be a little easier if you can see them coming and make preparations in advance. Are your systems getting the information into this reporting format in time to take appropriate action?

Even where your yearly budget is in balance you can run into cash flow problems. If all your expenses come when you hold your summer camp in February, for example while all your donations come in just before the close of the financial year, then you have a cash flow problem and have to budget across financial years to make it come out right.

It's not always gloom and doom. There can be some nice surprises. You may find that you have more money coming in than you had planned. You will then have to flag this for the Board and calculate the long-term implications of different ways of handling it. Being a not-for-profit organisation doesn't mean the organisation can't make a profit out of its operations, only that none of the members can personally benefit. If you have made a profit, you may wish to put it aside as a reserve to cover later disappointments or cash flow bottlenecks, or you may want to invest it in strengthening your programs.

The Treasurer should be able to separate out the accounts for particular programs within the total budget, and to be able to raise - and, if possible, answer such policy questions as "How much of your funding goes into programs, and how much into administration?" or "How much has the budget set aside for long service leave obligations?" The Treasurer needs to be able to understand enough about finance to be able to find new opportunities for the organisation, evade the hazards, and assure the Board that the systems work.