Terry from Morley has asked about Treasurer’s reports. He is in a not for profit association and he serves on the executive committee. Their treasurer is a qualified (and working) accountant but the reports he brings to the executive committee meetings are sparse or sometimes non existent.
In my experience with hundreds of associations, accountants do not always make the best treasurers. I’ll explain why in a moment. Book-keepers however, usually make excellent association treasurers.
There are 2 types of accountants broadly speaking – management accountants (often called financial accountants) and the ones that you and I come across in our daily lives helping with taxation and small business accounting. Management accountants are really good at looking at the big picture and have little interest in keeping the books. They are great at their job and they are great if your association has hundreds of thousands of dollars to manage.
For the small association, the large majority of the treasurer’s role is to “keep the books” and in my experience, management accountants don’t like doing that very much.
So having said all that, what should a treasurer’s report to an executive committee of an association contain?
1. There must be a budget. The best way is to divide your operation into portfolios, and make one person responsible for each portfolio. They draw up a proposed budget for the year and it, together with the other portfolio budgets are discussed at a budget meeting before the Annual General Meeting, where the budget should be approved by the membership.
Once the budget is in place, then each portfolio “leader’ operates within it and only goes outside it with the approval of the executive committee.
The first thing the treasurer should do at every meeting therefore, is to report on every budget item so that each leader knows where they stand, and the executive committee knows the overall situation.
2. There should be a report on money that has come in since the last meeting and how that compares with expected income – the budget again!
3. There should be a report on money which has been paid out since the last meeting.
4. There should be a report on funds held in the bank or investments.
Some organisations pass accounts for payment before the treasurer reports so that these payments can be included in Part 3 (above) of the report. In this way the report is up to date to the hour – a good place to be!
If an account is submitted for payment, it should have a “Requisition for Payment” form attached which indicates which budget item the payment falls under. I’ll send you an example Requisition for Payment form if you email me at [email protected]
The finances of any organisation are important. The executive committee is entrusted with the responsibility to manage the finances prudently. Without proper and regular treasurer’s reports you are simply not doing your job and leave yourself open to criticism – criticism you really cannot ignore.
All of this is just good governance.
What do you do if your treasurer cannot or will not provide reports with this information – get a new one. It’s your head on the chopping block as well as theirs if questions are asked.
Please Note: The author accepts no responsibility for anything which occurs directly or indirectly as a result of using any of the suggestions or procedures detailed in this blog. All suggestions and procedures are provided in good faith as general guidelines only and should be used in conjunction with relevant legislation, constitutions, rules, laws, by-laws, and with reasonable judgement.
Do Treasurer’s Reports have to have a motion of approval and second by the Board of Directors at their meeting?
You went from New York to Florida via California.
God bless you,
Good ideas on that.
Where can I find a sample report?
Should the books of an Association be available for membership perusal prior to and during an Annual General Meeting of that Association?
This is great for Executive Meeting. What should be tabled at a General Meeting. We are a non-profit association. Happy to have treasurer reports available, but unsure how detailed a report should go to general committee. Although all reports would be available on request? Thanx, Julie
The more you table, the less likely there are to be “suspicions”. I adopt the policy of allowing everyone to see everything then there are no questions or doubts.
Please Note: The author is not a lawyer and accepts no responsibility for anything which occurs directly or indirectly as a result of using any of the suggestions or procedures detailed in this blog. All suggestions and procedures are provided in good faith as general guidelines only and should be used in conjunction with relevant legislation, constitutions, rules, laws, by-laws, and with reasonable judgement.
Should members approve a treasurer’s report if they have not seen it or it has not been read? The only info given is the balance.
If the information provided is only a balance, that is not a financial report.
A financial report should include full details of all transactions – complete and outstanding – as well as balances.
Reports which only provide a balance should never be approved.
Please Note: The author is not a lawyer and accepts no responsibility for anything which occurs directly or indirectly as a result of using any of the suggestions or procedures detailed in this blog. All suggestions and procedures are provided in good faith as general guidelines only and should be used in conjunction with relevant legislation, constitutions, rules, laws, by-laws, and with reasonable judgement.
We have 7 general meetings a year and 2 sometimes 3 board meetings a year. Should we present a treasuers’ report at the general meetings or just board meetings?
Should treasurer reports be presented at an organizations general meetings or just at their board meetings.
Treasurer’s reports or financial reports should be presented at every opportunity to ensure that there is total transparency.
Please Note: The author is not a lawyer and accepts no responsibility for anything which occurs directly or indirectly as a result of using any of the suggestions or procedures detailed in this blog. All suggestions and procedures are provided in good faith as general guidelines only and should be used in conjunction with relevant legislation, constitutions, rules, laws, by-laws, and with reasonable judgement.
When there is an outstanding Check is it necessary to write the person name to whom it was written in the treasurer’s report or do you just identify the check number in the report?
It would be smart to write the recipient of the check in the report for clarity later.
Please Note: The author is not a lawyer and accepts no responsibility for anything which occurs directly or indirectly as a result of using any of the suggestions or procedures detailed in this blog. All suggestions and procedures are provided in good faith as general guidelines only and should be used in conjunction with relevant legislation, constitutions, rules, laws, by-laws, and with reasonable judgement.
Should the treasurer’s report be handed to every member, every month, at the meetings. We are a non-profit and the treasurer continues to hand out the report to everyone present. We have asked her not to do this but she continues.
Appreciate the recommendation. Let me try it out.