Every student chapter wants to maintain strong finances. Even though it's the responsibility of the treasurer to act as custodian of the accounting records, receive and deposit all monies and disburse monies, all of the chapter leadership must be involved with the chapter's finances.
Here are some general tips and suggestions to help guide your chapter's finances:
- Establish firm policies and procedures for dealing with all money matters.
- No one may commit funds or sign a contract except the treasurer and at least one other designated
officer or faculty representative.
- When reimbursing members, always require receipts for everything, no matter how small the amount.
- If your chapter depends on dues for funding, collect them at the beginning of the semester.
- Require a contract, letter, or agreement on everything from professional services to printing jobs.
- Deal with reputable businesses. Companies in far away places may be slightly cheaper, but what do you do when they don't deliver on time?
- Never pay for a product or service before you get it. Once you lose control of your money, you've lost 90% of your bargaining power.
- Do everything the most economical way, even though you have plenty of funds at that time, your chapter will need those funds someday.
- Require the treasurer to give financial reports on a monthly or quarterly basis. It's the chapter's funds, not the treasurer's. Everyone has a right to know and inquire.
The chapter should always have a budget. A budget is a guide for planning the chapter's activities. It's shows the chapter's planned income and disbursements. It also shows plans for the chapter's fundraising and projects during the year or semester. A budget accomplishes several items including:
- compels members to use funds efficiently
- provides accurate information to analyze, adjust and evaluate programs and activities
- aids in decision making
- provides a historical reference to be used for future planning
Your chapter's goals should be developed prior to establishing a budget so the goals are incorporated into the budget. You should also know your chapter's priorities and objectives. As you begin, ask yourself the following questions:
- What is the time period with which you are working (e.g., one term, entire school year)?
- What does your chapter most want to accomplish?
- How will you accomplish this?
- How much will it cost?
- Where is the money coming from?
Once these questions have been answered, you are ready to begin preparing your budget.
Preparing Your Budget
- Prepare an outline of the chapter's planned future activities.
- Determine and record available funds (e.g., carryover balance from previous year).
- Estimate and record expected income and when it will be available (dues, t-shirt sales, video games, etc.).
- Define and record needed expenses (advertising, rentals, printing, supplies, etc.).
- Review, revise and then assemble into a final budget.
- Have the executive committee vote for budget approval.
- Present the budget to all chapter members.
The budget must be flexible to anticipate conditions that might have been overlooked during the planning process.
Managing the Budget
- Once prepared and approved, it should be closely managed.
- Set and maintain a minimum cash balance.
- Formulate general policies and procedures needed to achieve objectives while providing internal control (e.g., allow only approved expenditures).
- Keep an accurate written log of financial transactions (income and expenses).
- Periodically compare the budget to your actual logged expenditures.
Maintaining accurate records is vital. Some items that should be documented include:
Budgeting for your Organization
- Payments authorized by the Executive Committee
- Copies of vouchers, receipts, bank statements, canceled checks, etc.
- Details of expenses provided to members
- Receipts of all money received
, Student Activities and Leadership, University of Michigan
, Student Organizations and Leadership Development Office, University of Nebraska at Omaha