Club Finances
It's vital to ensure that your club takes care of your cash. Each year we hear cases of money going missing at clubs due to a lack of financial controls. In some cases this has been ten’s & hundreds of thousands.
Money isn't everyone's favourite subject but it’s a key one for all clubs, please see some guidance & templates below to help your club move its finances forward.
Budgets should be set for both strategic priorities and day-to-day operational running costs for your club. The budgeting process should be overseen by the Committee/Board, with approval granted for each budget.
The benefits of setting a budget
- Helps with planning, e.g. knowing what the budget is per head for a team meal helps catering staff assess the quantity of food to buy
- Aid with financial control. Club members are aware of their spending limits which protects them and the club.
- Budgeting aids with the allocation of resources, helping you prioritise where to spend funds.
Cashflow Forecast
Budgets are typically set on an annual basis and remain static – not changing over the course of the year. Cashflows and forecasts provide a more real-time assessment of your club's cash position and are updated regularly based on actual income and expenditure, as well as other information available to the club.
Forecasts should be both short-term (e.g., for the next year) and long-term (e.g., for the next 3-5 years) to help your club assess if and how it will meet its strategic goals.
A cashflow forecast is an estimation of all club income and expenditure (i.e. cashflow) over a specified future period of time. It considers all cash and cash equivalents your club has access to, such as bank balances, petty cash, and cheque balances. Cashflow forecasting and budgeting are an essential part of managing your club’s finances effectively.
Resources
Financial controls aim to reduce risk in relation to club funds. Financial controls are specifically concerned with how clubs monitor and control the direction, allocation, and usage of their funds.
Example:
| Risk | Impact | Control examples to help mitigate this risk |
|
The Club treasurer or equivalent makes an unauthorised payment to themselves (fraudulent) |
Clubs may be unable to pay staff and suppliers or continue operating if cash reserves are depleted |
Payments over a certain limit require approval from two separate nominated people. Banking limits are set up to prevent cash withdrawals over a certain value. |
There are several good practice financial controls that your club should employ:
Authorisation
• Online banking access should be removed for people who have left the club / changed roles
• New suppliers should be approved by two people
• Restrictions should be placed on those who have access to cheques and those who can make digital payments
• Expenses over a certain value should be authorised by two people or approved by the committee/board. Check that your bank offers dual authorisation, many do
Reconciliation
• Internal accounts should be reconciled regularly with external bank statements to check they agree
• Actual results should be compared to budgets and cashflow forecasts
• Inventory per the bar / equipment room should be reconciled with club accounts
Performance reviews
• It is recommended that your club uses accountancy software to help manage your finances e.g. Xero, Quickbooks. Ensure more than the finance lead/treasurer has access to the accountancy software to keep an eye on the finances
• Club’s bank statement(s) should be reviewed regularly by committee/board members beyond the finance lead/treasurer
• Cash deposits should be counted by two people
• Cashflow forecasts and budgets should be reviewed by committee/board members
Physical controls
• Unique computer passwords should be used, which are regularly updated and not shared
• CCTV and a monitored alarm system should be installed
• A safe is used for petty cash with only certain people allowed access via a code / keys
Segregation of duties
• Expense claims are authorised independently, e.g. by someone other than the person submitting the claim
• The person who reviews accounting records should not have access to cheques or cash
Resource
Do you have a Reserves Policy?
A Reserves Policy is a document that details:
a) The types of income generated by the Club / Constituent Body and the risks to said income;
b) The types of expenditure incurred by the Club / Constituent Body and the risks associated with said expenditure;
c) The amount of monies needed to cater for the identified risks;
d) What the actual reserves amount is and how any shortfall will be raised;
e) The level of monitoring required to ensure that the Reserves Policy requirements are met.
A Reserves Policy is required by the club to ensure that:
a) The Committee/Board manage the Club responsibly and in the best interests of the Club / and its members;
b) The Club / Constituent Body is in a sound financial position and able to manage any risks.
We recommend clubs have a Reserves Policy, please see our template Reserves Policy to help set one up at your club.
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