For a club to be successful and sustainable, it’s crucial to use funds from members and other sources wisely. Financial governance ensures that the club’s finances are managed effectively. Here’s what it involves:
Governing a Club’s Finances
- Right Individuals: Involve the right people in financial matters.
- Right Structure: Establish a proper authority and delegation framework.
- Right Controls and Procedures: Implement controls to manage risk.
- Right Information: Provide accurate financial data for decision-making.
The Right Individuals
The key financial role in the club is the Treasurer. This role is vital, so recruit someone who is organized and confident in handling figures and managing money.
Treasurer’s Role
The Treasurer is the main financial officer of the club, responsible for:
- Preparing budgets
- Managing financial affairs, including banking income, paying invoices, and monitoring the bank account and cash flow
- Preparing and presenting financial reports to the committee
- Providing financial guidance to the committee
- Overseeing financial procedures and processes
The Right Structure
The Treasurer is part of the financial governance structure, but no single person should handle financial transactions from start to finish. Safeguards to consider:
- Budget Holders: Appoint individuals responsible for managing budgets.
- Spending Authority Levels: Set limits on spending authority.
- Finance Sub-Committee: Monitor club finances more closely.
- Committee Oversight: Ensure the committee understands and reviews the finances, as they are ultimately responsible.
Create a chart showing your financial structure so everyone is aware of their role.
The Right Controls
Having the right structure makes it easier to implement procedures and controls to reduce risk and avoid financial difficulties. Clearly outline these processes in your financial procedures so club members can comply.
Examples of Procedures and Controls
- Cash Income: Signed by two individuals.
- Spending Limits: Set authority limits for spending.
- Bank Reconciliation: Chair reviews the Treasurer’s reconciliation of the bank balance with the club’s accounting records.
- Documentation: Retain invoices, receipts, etc.
- Conflict Management: Manage conflicts of interest.
Download our ‘club’s financial procedures’ document for more information.
The Right Information
Having accurate financial information presented at committee meetings ensures informed decision-making. The Treasurer should prepare a regular financial report, including:
- Income and Expenditure Account: Compared to the budget.
- Balance Sheet: Showing club assets and liabilities.
- Additional Information: Cashflow forecasts, details on debtors and creditors, etc.
Send the Finance Report to each committee member in advance of meetings for adequate scrutiny and questions.
Key Questions for Financial Reports
- Are there any unpaid expenses that should be included in the financial statements?
- Have you included payments that have not cleared the bank account?
- Is there unbanked income that needs accounting for?
If these items are not included, the club’s cash position may appear healthier than it is, leading to poor decisions, like approving additional expenditures that could result in a cash shortfall.
By following these guidelines, you can ensure that your esports club’s finances are well-governed, promoting sustainability and success.
