Financial basics for your club

Good financial management helps ensure your club’s long-term sustainability, so you can keep providing the best experience to your members well into the future.

Financial management isn’t just the treasurer’s job; the entire management committee is accountable for the club’s financial performance. While the treasurer manages the club’s day-to-day finances, all committee members share equal responsibility for every financial decision.

Because of this, any payments made by not-for-profit clubs must be approved or later ratified at a management committee meeting.

‘Not-for-profit’  means that surplus assets or profits cannot be distributed among members. Instead, these profits must be reinvested to fulfil the organisation’s objectives as outlined in its constitution.

Reinvestment could include the accumulation of funds in a bank account to secure your financial sustainability, or for reinvestment at a future date. It's important to recognise that a not-for-profit club operates as a business, and therefore, sound business principles should guide all financial decisions.

Resources

Financial terminology

Understand financial terminology (PDF, 162.2 KB) to help ensure your club’s committee is familiar with basic financial terms. This ensures everyone is comfortable and understands what is being discussed, for example when you talk about money.

Financial safeguards

Simple financial safeguards (PDF, 471.1 KB) can protect your club’s money from accidental loss, theft, or fraud.

These include:

• approving or ratifying all expenditure
• requiring 2 people to co-authorise payments
• keeping up-to-date financial records
• supervising anyone handling cash
• minimising cash handling
• contacting recipients of large amounts prior to making payment
• supporting anyone to speak up early if something doesn’t feel right.

Every management committee member needs to stay informed about your club’s financial position, so keep an eye out for red flags, such as:

• an unexpected drop in revenue or dramatic increase in costs
• continually using the same suppliers without inviting other suppliers to quote
• committee members using their own bank accounts rather than using the club’s payment methods
• money appearing without a clear source
• vague answers to questions about the club’s financial situation.

It's important to ask questions that challenge assumptions, clarify information, and promote transparency. These types of questions can help committee members identify potential risks and opportunities and make informed financial decisions.