Managing the Accounts at Your Rugby Club
It is important that all sports organisations keep some degree of control over the finances generated through their activities - rugby clubs are no exception to this. There is a need for clubs to have accurate accounting systems in place so that records of financial transaction which have taken place are accessible and transparent for auditing purposes. In order for this process to be carried out effectively clubs and their committees should look to appoint a treasurer or an accountant to manage the finances of the club.
What is needed?
It is often the case that when it comes to recording the clubs income and expenditure it tends to be scribbled down on a scrap of paper and records of any financial transactions are limited or non-existent. It is important to keep records not only for audit purposes but also to have a system of control over financial transactions and any cash handling that the club, members, volunteers and/or employees make. In order to efficiently manage the books the treasurer might look to use some or all of the following depending on the size of the club and the number of transactions it makes:
- an analysed cash-book to record money (receipts) and (payments)
- a receipt book (in duplicate) to issue receipts for money received
- filing or storage system to collate and store all financial transactions and information for the club
- petty cash box
- electronic till register(s)
- previous years’ financial records (if available)
What are the accounts?
The accounts for your club should be made up of records of all income and expenditure, usually covering the financial year (12 month period normally between April and March). However, it might make more sense for clubs to try to base their financial year around the season. A financial year from June to May therefore might be more suitable. It is advisable that following a 12-month period, the club accounts are audited by an independent party to check and verify the transactions.
Therefore, all receipts and payments should be recorded in the accounts book and a summary of these should be prepared for the auditor. If your club has limited company status it is required by law to have a registered auditor who will produce a report for the club under the Companies Act. However, the vast majority are members clubs and should elect honorary auditors to inspect and verify the accounts that the treasurer produces. This helps to provide transparency throughout the process and provides the club with reassurances that all transactions are accountable.
In terms of recorded transactions there are number of key items that the treasurer should ensure are included:
- date of entry
- reference number for each entry that should be cross-referenced with invoices, receipts etc
- name of supplier/person that club is paying or receiving from
- cheque/debit number for those whom the club is paying
- receipt number for payments received
- details of the transaction i.e. what it was for
- VAT element (only if VAT registered)
Preparing and delivering a budget
It may be that there is a need for the treasurer to also help to put together a budget for what is likely to happen as opposed to simply recorded all the historic financial information. Future forecasting can be very useful in terms of the development of your club and will help decision making and planning. For example, identifying available finances to put towards supporting an application for grant funding a new pitch, clubhouse or training facilities.
In preparing an annual budget the treasurer should identify all expected expenditure and income, which can be accessed through past accounts, and then perhaps identify any areas that might need adjusting. It might be that your club is looking to improve the clubhouse and this requires a certain amount of capital expenditure. The treasurer may help to identify areas within the budget where the club can increase income or reduce expenditure in order to try to generate the amount of capital expenditure required.
It is important to note, however, that it is not a good idea to set a budget with a deficit in the hope that income will be generated from somewhere to cover it. Always try to aim for a budget that will break even and build in a contingency for unexpected items that may crop up during the year (e.g., unexpected maintenance issues or drop in members).
A prepared budget will help the club have much more control over its finances and it will provide you with a far more accurate prediction of where the club will be financially at the end of the year. This will enable the club and the committee to make decisions based on a clearer understanding and idea of the total funds available.
Important tips to remember
The following are just a few tips that are worth bearing in mind when you come to setting up the systems and processes for handling the money within your club:
- Your club should keep proper accounts, prepare regular statements and ensure a level of financial planning
- Your club/committee must be seen by all members to be managing the money with extreme care, honesty and sensitively, or there will be no confidence to contribute funds to it
- The financial systems in place at the club should assist in the prevention of fraud not contribute to it
- All financial transaction should be recorded
- Your systems and management of the clubs finances should be consistence month to month, year on year so comparisons can be made
- Keys for petty cash boxes, safes and tills should be held by a few specified people
- Incoming money and outgoing money should be kept separately with any surplus cash paid into bank accounts promptly
- Budgeting is one of the most important financial functions for your club and you should not try to manage without one. It is a recipe for financial difficulties!