Good Financial Practices
Develop a Budget
Sound financial planning is important for your organization's strength, stability, and permanence. Budgeting is an important planning tool and an integral part of program planning. A budget is a projection of income and expenses, but can be revised as plans change. Prepare a budget for your organization with expected income and expenses for the year. Check out a Sample Budget.
Income revenue includes membership dues, fund-raising events such as ticket sales or donations, and any funding grants you might receive. Expenses could include telephone bills, printing and duplicating, equipment, postage, travel, national or regional membership dues, and rental of office space. Examples of expenses for special events include speaker/entertainment fees, space rental, mileage, lodging, security costs, publicity, receptions, and sales tax.
The Events Planning Guide is your guide to planning successful programs on campus, helping student organization leaders plan effective programs and events. Check it out!
Keep a Financial Journal
As a registered student organization, you are required to maintain accurate and complete financial records of all receipts and expenditures. You are further required to make these records available to any member of your organization. Should you receive a request from the Director of the Center for Leadership and Involvement or the Chair of the Committee on Student Organizations, you are required to provide financial records within 15 days of the request. A journal is a useful way for your treasurer to keep track of detailed expenses and deposits, earnings, and interest.
All expenses paid by an organization should be substantiated by an original receipt from the vendor. If this is not possible, the individual requesting reimbursement should be required to furnish a signed statement that explains the purpose of the expense. Such an expense should also be approved by the officer/committee person responsible for the activity/event for which the expense was incurred. The treasurer should reconcile the books with the bank and any investment account(s) and, at least monthly, prepare a financial statement for the organization's board/officers.
The financial statements and records of the organization should be reviewed/audited annually by an independent group/individual. This can be a separate committee of the incoming treasurer as long as it is done before the individual(s) have authorization to expend funds.
Organizational financial records should be retained for a minimum of five years. This can be accomplished by sealing all records in an envelope or box at the time of transfer to the new treasurer/bookkeeper. The date to destroy the information should be clearly identified on the container to ensure future officers know the proper date.
Tips for Developing Sound Financial Procedures
- If you have an outside bank account, require two signatures to sign off on checks and require two names to be listed on the signatory card. This may not be possible as fewer financial institutions offer two signature checks. Another strategy would be to have at least 2 signers on the account(s) so that they can be monitored by more than one person.
- Don’t use ATM/Debit card services. If your organization chooses to get a debit card, do not use it for cash withdrawals and ensure that only the financial officer has access to the card.
- Talk with your banking/financial representative to work out the details of your bank account. It is advisable that all banking transactions are handled through checks and deposit slips so there is a written record of all transactions so as to minimize any risk of misappropriation or misuse of student organization funds.
- In the event that you do need to withdraw cash from your account, fill out a withdrawal ticket for the account, document on your copy of the withdrawal ticket what the cash is to be used for, and attach receipts paid for with cash to clearly show what the cash was used for.
- Inform all members in advance that they are expected to provide original receipts when seeking reimbursement. Whenever possible, handle payment of expenses directly with a check (or through purchasing and payment procedures of the university for any financial support provided by a departmental sponsor).
- In developing budgets, estimate expenses and income as realistically as possible. Contact vendors for estimated costs as you develop the budget.
- Develop a clear mission and goals for your organization. Financial decisions and priorities for expenditures should relate consistently with the organizational mission and goals.
- Develop clear written duties and expectations for all officers, especially the Treasurer.
- The Treasurer should prepare a financial report/statement monthly for the organization’s officers/Board/full membership.