Cherie Trewavas –
For non-profit organisations, financial literacy and the ability to make sound financial decisions is incredibly important.
After all, the greater your understanding of how your non-profit’s finances work, the smoother and more efficiently things will run, which in turn means more money that can be put to good use achieving your goals.
In this ‘BNZ Non-Profit Series,’ I will be writing about how non-profit organisations can build their financial capability through things like speeding up cash flow and the importance of keeping up to date and accurate books to ensure financial viability.
There are plenty of other internal processes that need to be straightened out in order to keep everything running efficiently, and one of the most common areas where non-profits can go wrong, is also one of the most basic – your bank accounts.
The importance of having the right bank accounts to suit your operation is easy to overlook; a bank account is a bank account, right?
Here are seven tips to help get your banking on the right track.
The right accounts: As simple as it seems, having the right account to suit your business is one of the easiest things to get sorted, all it takes is a chat with your bank. Many banks actually offer non-profits accounts with reduced fees.
Put your money to work: Don’t let your money sit idly about in a non-interest bearing bank account. Ensure that it is working for you by sticking it in a savings account or, if you know you won’t need that cash until later, a term investment.
Stay on top with Internet Banking: Use every bit of technology your bank has to speed up reconciliation by using internet banking and mobile apps where available. Having up to date information at your fingertips can really speed up the flow of money through your accounts.
Plug in your accounting software: Use cash management software that link with your bank account to speed up reconciliation. Many items can be pre-coded to automatically code debits and credits, something that will help, come end of the year.
Reduce risks by requiring two to sign: It’s not a nice thing to imagine, but fraud can and does happen, so reduce the risk and ensure your bank accounts have at least two to sign.
Update those authorities: Staying on the topic of fraud, it is vital that your non-profit organisation has up-to-date account operating authorities.
We often find, particularly in the non-profit sector, that signatories are very out of date. Banks have strict rules they must follow when it comes to who has the power to operate the accounts, and it’s up to you to make sure the signatories are in order.
At the very least, this will help avoid frustration getting things done, and at worst, it can avoid fraud happening down the track. Also, don’t hand passwords and logins on to the next treasurer, have the new person coming in set up their own.
Make use of freebies: Make full use of any freebies on offer, in particular, use free providers of payroll processing when you can. Thank You Payroll will process all pay runs, PAYE, GST, KiwiSaver, Pay Slips and more all at no cost (Inland Revenue Department pays Thank You Payroll via a subsidy scheme).
It is designed for small to medium organisations with PAYE of less than $500,000 per annum and is a great way to make sure IRD payments are getting paid and the payroll is fully compliant.
If you have any questions about how BNZ can support your non-profit organisation call us on 0800-273916.
The above article is intended as a general discussion only, and is based on selective information which may not be suitable for your purposes. BNZ strongly recommends the recipients take independent legal, investment and financial advice prior to making any financial or investment decisions.
Cherie Trewavas is BNZ Partner based in Wellington. The above is her insight into building the financial capabilities of Not-for-Profit Organisations.
BNZ is the Title Sponsor of the Indian Newslink Indian Business Awards 2106 and Indian Newslink Sir Anand Satyanand Lecture 2016.