Just a brief posting today, methinks.
Treasurers - who'd be one? Especially in organisations without admin or finance staff like our local faith communities. I had the role for three years and got myself into all sorts of knots - the end of the financial year was an interesting time as it kind of went like this ... £1,500 too much, then £200 too little, then £80 too much and then something like £4.21 too little - eventually I would get the discrepancy between bank figures and cashbook to zero but it hurt to get there. Now I am a woman who loves figures but I don't love accountancy and book-keeping.
Treasurers are often accused of being mean because many don't appear to like spending money. However the buck stops with them if there were ever an audit of how money had been spent. Treasurers should have an overview in their heads as to how the organisation is doing. What is being spent, what is coming in, what is on the horizon (both expenditure and incoming) and what the community would dearly love to do?
The Charity Commission is quite clear that money in should equal money out. We are after all charities and money should be used for our charitable purposes - having money sitting in a bank is not a charitable purpose. But charities can carry reserves and capital funds. Reserves are to keep the charity going should income reduce (as with a stock market downturn) or should expenditure increase (if the water charging policy is implemented) and for planned maintenance and as a buffer for say emergency repairs. A charity may also save money for a large project say retiling a roof or making the building accessible.
However if you carry any kind of extra money other than to cover usual expenses then you must have a reserves policy. This must say how much you have or intend to have and for what purposes. It is a useful exercise to write a reserves policy as it enshrines to some extent your community's thinking about risk, your knowledge of future financial issues and your aspirations for the future. I will post an example of a reserves policy within the week.
Now I must away to drive to Yorkshire and trust it isn't raining there as it is here.