Talking Finances

I recently came across a booklet of ‘101 top tips’ from successful Australian entrepreneurs offering reflections of what they’ve learned on their journey.

A recurring theme amongst the entrepreneurs was the co‐existence of three key principles – high‐quality delivery,great people, and strong financial management – three pillars that are a valuable blueprint for organisations of any size.

One of the first pieces of advice a banker will provide to any organisation is that the key to strong financial management is to never take your eyes off the cash flow.

To do this successfully you need an effective accounting system, plus simple to follow processes that make it easy for your staff or treasurer to record the everyday transactions of your organisation.

Here are a few ideas that will help to ensure your books stay in good shape:
􀂾 Everything has to add up: adopt a methodical and reliable accounting system. Make the most of its software and processes to record all transactions relating to monies coming in and going out.
􀂾 Time savers: if needed, investigate additional products such as tools to manage invoicing, superannuation and payroll. Your banker can help here.
􀂾 Sound administration: keep a separate file for each project, make sure your internet banking forms clearly identify their purpose, and keep a hard copy of receipts and budget spreadsheets as a back‐up.
􀂾 Never let your accounting processes slide: no matter if you’re a larger organisation with auditing requirements or a smaller group (auditing requirements vary from state to state), you’ll need to keep accurate and up‐to‐date records for taxation reasons.

Setting up a full and documented accounting system and easy to follow processes will also reduce the potential for fraud or simple mistakes like miscalculations which can be damaging to your organisation.

Also, your Treasurer may change overnight through accident, retirement or new election, and the newcomer will quickly need to extract everything they need from your organisation’s records.

Effective accounting is not only the foundation of a sustainable organisation, but ultimately a time saver that will free‐up your time so you can focus on providing your services where they’re needed most.

Article by Vanessa Nolan-Woods, Head of Community Markets at Westpac. Reproduced from the Our Community newsletter.