Being a Club Treasurer


Factsheet - ISSN 1198-712X   -   Copyright Queen's Printer for Ontario
Agdex#: 057
Publication Date: 04/89
Order#: 89-107
Last Reviewed: 11/97
History: Reprinted February 1991
Written by: I. Rumbles - Rural Organization Specialist/OMAF

Table of Contents

  1. Introduction
  2. Handling Money For A Club
  3. About Financial Institutions
  4. Why A Financial Institution?
  5. Two Accounts
  6. How To Open An Account
  7. Signing Officers
  8. Recieving Money
  9. How To Make A Deposit
  10. Paying Bills
  11. How To Write A Cheque
  12. Closing An Account
  13. "Keeping The Books"
  14. Financial Report
  15. Making Decisions
  16. "Reconciliation"
  17. A Safe Place
  18. Auditor
  19. A Last Word
  20. References

Introduction

No matter what type of club you are involved with, money is always involved - money which belongs to the club as a whole not to the individuals concerned. The person who looks after the financial affairs of the club, the Club Treasurer, wants to do what is in the best interest of the present and future club members.

Handling Money For A Club

The Treasurer can receive real satisfaction from handling the Club money effectively. Like any other group activity, there are a few rules and procedures to follow. That's what this Factsheet is about - how to handle the financial affairs of your club in a businesslike way.

About Financial Institutions

Canada's financial system is over 160 years-old and several of the present banks were established long before Confederation. Canadians use them in many ways. They are entrusted with by far the largest proportion of savings, and people in this country have the convenience of writing cheques every day.

Most chartered banks, credit unions, and trust companies offer a complete range of financial services, although this Factsheet deals only with the services most likely to be needed.

For your club as for you personally, a financial institution connection is very important. Choose yours carefully and then find out all the ways it can be helpful to you. You will find the Manager and staff anxious to help and give you useful advice at all times.

Why A Financial Institution?

The Club is just like a store or a business. It needs a system to keep its money safely, earn interest on the amount not needed immediately, provide a method to pay bills and provide a summary of transactions at regular intervals.

Your financial institution will do all of this for you. That's what it ' s there for - to act as a go-between in financial matters of all kinds. The financial institution you choose will serve your Club in the same way as the financial institutions serve millions of individuals and thousands of group enterprises of all kinds throughout Canada.

Two Accounts

In looking after the financial affairs of your Club you do not want to be responsible for a big bundle of cash. and you don't want to pay the bills with cash either (cheques are much more businesslike).

Usually your Club will need two types of accounts:

1. Current Account - This account is for the day-to-day business of the Club - to deposit money as it comes in and to write cheques as bills need to be paid. Your Club name is often printed on the cheques, along with the account number.

Once a month, or more often if necessary, the financial institution will send you a printed "statement" showing deposits (the money put in) and withdrawals (the money taken out) during the previous month. These are called transactions. At the same time, the financial institution will return the cheques you have issued. They will be marked "canceled" showing that they have been cashed by the people you sent them to. They then become receipts.

On Current Accounts interest is not paid and fees are charged for services. It is a good idea to shop around to see what the service charges are and who will give you the best deal.

2. Non-Chequing Savings Account - This account is for the money the club does not need right away. You cannot write cheques on it, but you can withdraw any part at any time, or transfer any amount to the Current Account. And because the institution is in effect "borrowing" your money, it will pay you a rate of interest.

In most cases there are no service charges to operate a Savings Account.

How To Open An Account

After you have selected the financial institution you are going to do business with, go to their service counter to open your account. A representative of the financial institution will take it from there. The financial institution is there to serve you, so do not be hesitant to ask questions.

Signing Officers

Most clubs require that cheques and other withdrawals be signed by two officers of the Club, one of whom is usually the Treasurer. Depending on your Club they may decide to appoint additional Signing Officers, any two of whose signatures will then validate a cheque or withdrawal.

The financial institution will usually require a list of the officer positions in the Club (i.e., President, Vice-President, etc.) with an indication of who has signing authority. Each person with signing authority will be required to fill out a Signature Card, so they can be checked against the signatures on cheques the Club issues. Remember that when the officers change in the Club, the financial institution should be advised and new Signature Cards will have to be signed.

Recieving Money

Money for a club is received as either cash or as cheques.

Cash Receipts should be issued for all cash received. A Cash Receipt should include the date, who the money is from, what the money is for and the dollar amount. The sum of the Cash Receipts and cheques should be equal to the bank deposit. Cash that is received should be deposited as soon as possible. Some financial institutions will provide a special lockable bag that can be deposited at night or on the weekends.

When cheques are received make sure they are made out properly to the club. If a cheque is made out to an individual, make sure they sign the cheque, then write on the back of the cheque "For Deposit Only to the Credit of (Name of Club)".

How To Make A Deposit

A typical Deposit Slip looks like the illustration shown.

Sketch of a typical deposit slip

When you have money to put into the Club accounts:

  1. Write on the back of each cheque the words, "For Deposit Only to the Credit of (Name of your Club)".
  2.  
  3. Complete a Deposit Slip to show the amounts of the cheques and cash to be deposited. (The teller can show you how.)
  4.  
  5. The teller will give you a copy of the Deposit Slip, stamped with the financial institution's name and initialed on behalf of the institution. This is your receipt.

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Paying Bills

All expenses should be paid by cheque, never by cash. A cheque is your written instruction to pay some of your money to the person or organization named.

Bills for a club can be presented to the Treasurer as: an invoice or cash register receipt that has already been paid; and an unpaid invoice where the Treasurer pays the company directly. The Treasurer should never pay an expense unless there is a receipt or invoice.

Receipts or invoices for an expense should include; date, name of individual or company being paid, dollar amount, cheque number, and an indication of what the expense is (example: rent, postage, etc.)

When receiving an unpaid invoice the Treasurer should pay the bill within two weeks.

How To Write A Cheque

The illustration shows the different parts of the cheque to fill in.

The illustration shows the different parts of the cheque to fill in. Always use a pen, never use a pencil, and print or write clearly.

If you make a mistake, do not try to correct it. Write void on the cheque and write a new one.

It is important to use only the cheques which the financial institution has given you because they are unique to your account. In the illustration above you will see some strange-looking figures on the bottom left of the cheque (No. 7). These are MICR numbers and they refer to your account number. They are printed in special magnetic ink which is "read" automatically by the financial institution's special sorting machines.

The following relates to the cheque illustrated above.

  1. Date of issue (don't date on a Sunday)
  2. Number of the cheque - for your records
  3. Person or organization being paid
  4. Amount in figures
  5. Amount with the number of dollars in words and number of cents in figures, as shown. Start to write on the left and draw a line right across, as in the example. Make sure that the amount matches.
  6. Signatures of two authorized signing officers. As mentioned earlier, it is a common practice to have two signatures on a cheque.
  7. MICR figures, and above them is a spot to indicate your account number as a cross reference.

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Closing An Account

If the time comes when you no longer need an account for one reason or another, tell the financial institution the amount of cheques outstanding. Then the financial institution will give you the balance in cash or arrange to transfer it elsewhere according to your instructions.

It is a good practice to close an account when you do not need it rather than leaving it open with only a token amount. To do so means untidy bookkeeping for the Club and an unnecessary chore for the financial institution.

"Keeping The Books"

Every organization needs financial records and these are commonly called "The Books". For most Clubs all that will be required is a general ledger.

A General Ledger is a loose-leaf record of all accounts, providing information on all money coming into the club (Credits) and all the money paid out (Debits). A double entry system of accounting should be used. On the last page of this Factsheet is a general ledger sheet that you can copy and use for your club. The left side of the page includes columns for the date, explanation, cheque number, debit, credit and balance. For each transaction this section should be filled out. Across the rest of the page there are columns for each major club activity. This double-entry bookkeeping system will allow you to be aware of the actual money the Club has, while also keeping track of whether an activity is making or loosing money.

Generally, the Club Books should be maintained by the elected Treasurer. In some clubs the Secretary might also act as the Treasurer.

A typical page from a General Ledger looks like this:

A typical page from a General Ledger

Financial Report

At each Club meeting the Treasurer should make a report on the financial affairs of the Club. Unless a full financial statement is requested by the executive, the financial statement only needs to include:

  • the date of the last report, and the balance on hand at that time
  • all Receipts (Credits) since the last report
  • all Expenses (Debits) since the last report
  • the date of the report and the new balance on hand

Making Decisions

Since the club will regularly make decisions on how to spend the money it has, it is important that the Treasurer bring to meetings a summary of the previous year' s expenses and receipts. This will give the executive a base from which to work.

"Reconciliation"

Once a month you will receive a "statement" along with your canceled cheques. The statement indicates the balance in the account at the end of the previous month and then a list of "entries" each of which represents either a credit (deposit), debit (cheque), service charge or interest.

You should check your records against the statement. See which cheques have not been cashed and what deposits are not on the statement. This process of checking your records against the statement from the financial institution is called "reconciliation". This process helps you to assure that your records are correct and that the financial institution has not made a mistake.

If there is a problem and the statement does not agree with your records, contact your institution right away so the mystery can be solved.

A Safe Place

The records of the club should be kept in an orderly fashion in a safe place.

The Treasurer should keep a separate file folder for: statements and canceled cheques, 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 possible the records should be kept in a fire proof safe or a safety deposit box at the institution where you have your accounts.

Auditor

Once a year the accounts of the club should be checked by someone other than the Treasurer or member of the executive. This person, who may be appointed by the executive, is called an Auditor. The Auditor makes sure "the books" are correct. At the Annual Meeting of the club, a report from the Auditor should be made indicating the books are in order.

A Last Word

Looking after your Club's financial affairs is mostly a matter of common sense and remembering to write down the details of each transaction at the time it occurs so that your don't have to try to catch up later.

Your financial institution will help you get started and the people there will always be glad to give you advice as questions come up.

Good luck!

References

Banking for your Club - a guide for young people's groups. The Canadian Bankers' Association.

 Relevent OMAFRA Factsheets
A Guide to Bookkeeping for Non-Profit Organizations.

Advisory Committee

Peter Fleming, Manager, Rural Organizations
Ruth Gagnon, Greater Windsor Horticultural Society
Wayne Hyland, Canadian Imaperial Bank of Commerce
Linda Scott, 4-H Member
Katherine Schmidt, Rural Organization Specialist


Blank General Ledger

blank general ledger

 


For more information:
Toll Free: 1-877-424-1300
E-mail: ag.info.omafra@ontario.ca