'Help for sports clubs & volunteers in Wales'
Club Finances

Governing your Finances

In order for a club to be successful and sustainable, the funds that come from members and other sources need to be used wisely and effectively. That’s why financial governance is a big priority.

This basically involves having:

  • The right individuals involved in financial matters
  • The right structure with appropriate authority and delegation
  • The right controls and procedures in place
  • The right information to make effective decisions

The right individuals

The main financial role within the club is the treasurer. This is a vital role so it is important you recruit someone who is organisational and confident in dealing with figures and managing money. 

Role of the Treasurer

The Treasurer is responsible for the club’s finances and acts as the main financial officer for the club. The treasurer:

  • Prepares the budgets
  • Sorts out the financial affairs, including banking income, paying invoices and monitoring the bank account and cash flow.
  • Prepares the club’s financial reports and presents them to the committee
  • Provides guidance to the committee on the management of finances
  • Is responsible for financial procedures and processes.

To avoid any doubt, it is good practice for the treasurer to have a Role Description.

The right structure

Although the role of the treasurer is important, it is just one part of the club’s financial governance structure. You need to ensure that no one single person is ever able to carry out financial transactions on behalf of the club from start to finish. You need to build in some safeguards.

In a small organization, like a club, this can be difficult to achieve so think about:

  • Appointing budget holders with responsibility to manage budgets
  • Setting up levels of limited spending authority
  • Setting up a finance sub-committee to monitor club finances more closely
  • Ensuring the committee understands and reviews the finances as they are ultimately responsible

It is a good idea to create a chart showing your financial structure so that everyone is aware of the part they play.

The right controls

Having the right structure will make it easier for you to put in place the right procedures and controls so that you reduce risk and help ensure your club does not get into financial difficulty.

These processes should be clearly outlined in your financial procedures so that people in the club are aware and can comply.

Examples of procedures and controls are:

  • Cash income is signed by two individuals
  • There are limits of authority for spending
  • The Chair reviews the treasurer’s bank reconciliation (this is the difference between the bank balance and the corresponding amount shown in the club’s own accounting records)
  • Documentation (like invoices and receipts etc) is retained
  • Conflicts of interest are managed

The procedures should be approved by the committee and reviewed on a regular basis.

If you would like to know more information, download the 'club’s financial procedures' document.

The right information

Having the right financial information presented at committee meetings will make sure that the right decisions are made with the club’s finances in mind.

The treasurer should prepare a financial report on a regular basis and this should include the following:

  • An Income and Expenditure Account compared to budget
  • A Balance Sheet – showing club assets and liabilities
  • Any other information considered necessary, e.g. cashflow forecasts, details on debtors (who owes you money) and creditors (who you owe money to)

The Finance Report should be sent to each committee member in advance of meetings so that there is sufficient time for scrutiny and questions.

Examples of good questions include:

  • Are there any expenses not yet paid but that should be included in the financial statements?
  • Have you included any payments that have not yet cleared the bank account?
  • Is there any unbanked income that needs to be accounted for?

If these items are not included, the club’s cash position will look healthier than it actually is.  This may result in poor decision making, such as additional expenditure being approved leaving the club with an overall shortfall of cash. 

Further Information

If you would like finance training, Business Wales offer online courses. You need to register before taking a look at the Managing Your Finances module which covers cash flow, budgeting, accounts, profit and loss and balance statements.