Wednesday 25 May 2011

Passing The Buck

When your term of office as a Treasurer comes to an end, there is a simple but clear process for handing over the bookkeeping responsibilities to the new Treasurer.

Firstly, it is imperative that you make sure that all of your financial records are up to date, even if there are monies outstanding or invoices unpaid for some reason. As long as you have it all clearly recorded, the new office bearer can move easily into the role and the financial administration can continue to run smoothly.

Many committees don't remember to have their books audited but it makes sense to have a complete audit before you hand the books over to someone new. You will then have a clear record of the state of the finances at the point of handover. Many accountants will offer their auditing services free of charge if you are a small NFP organisation so make enquiries with your local accounting services.

When you contact the bank to organise for any new signatories to be added to the account, don’t forget to get the necessary paperwork for removing anyone who no longer holds a role as signatory within your organisation. Otherwise you can end up with a long list of people who can move money in and out of the NF’s bank account/s and it can become very difficult to maintain accurate banking records. That can obviously expose you to some risk.

Always hand over every historical financial record to the new Treasurer. Although legally you are only required to keep records for the past seven years, it can be a handy reference tool when it comes to expenses and investments, so it often pays for an NFP to keep them for much longer.

Finally, spend some time with the new treasurer and show them how the system works. Every system is a little different and it is important that they can follow an audit trail if they need to look up an older transaction.

A good handover means a smooth progression for the role so take the time you need together.