Do you manage the finances of your charity? Struggling?
The British Bankers’ Association have published some helpful guidance for charities. The guide is intended to help you with your responsibilities and help you ask the right questions. It’s mostly aimed at smaller charities but it contains useful principles for everyone.
As a taster, here are some questions to get you started:
You should consider your charity’s overall financial position and what you are looking for from a bank before deciding which bank/s to approach. You might just need somewhere to keep your charity’s cash: a straightforward current account with instant access. Or you may want a range of different accounts and services, for example a current account, savings account, credit facilities and longer term investment options.
The following questions will help you establish the type of bank you wish to bank with, the type of account you need, and the services you require.
- What does the cash flow of your charity look like over the next 12 months (or longer)? Things to consider regarding cash flow include the likelihood of you having excess cash for part of the year (therefore you might need to know about short term investment opportunities) or needing borrowing facilities – or perhaps both. Keep in mind any requirements laid out in your charity’s reserves policy.
- How do you receive your income? In cash, cheque or electronic payments?
- How will you authorise payments – will you require dual authorisation?
- Do you need a company credit card(s)?
- Do banks’ ethical policies matter to your charity?
- Do you need the services of a bank with local branches (e.g. for banking funds)? Do the local bank branches need to be easily accessible (e.g. cater for wheelchairs)?
- Does your charity operate abroad? Will it need to make foreign currency transactions?
- Will you need a number of bank accounts or just one?
You can find a copy of the Guide on the Charity Finance Group website. If you need any more information, get in touch: andrewkmackay[at]gmail.com.
And don’t forget about Gift Aid too!