Money Management

This section is all about organising the finances (money) for programs or for the whole organisation. It will give you an introduction to planning your budget how you will spend the program’s money so you can show the people with the funds how you are going to spend it, or so you know how much money to apply for. The funding body would not be doing its job properly if it allowed funds to be taken when there is no realistic plan for how the money will be spent.  The plan will then act as a guide for the records that need to be kept so that you can keep track of the money.

If you already have a budget for a program but no money to run it, go to the Funding section which will give you ideas and links to funding sources.

Planning your Finances

A plan for how money is to be spent is called a budget. A budget can be used as a tool to help decide whether too much money is being spent in some areas or if the money is running out altogether.

This section will introduce you to the different records that need to be kept so the organisation has a record of how the project went and so the funding people know where their money was spent. These reports should be made up every month, so the organisation knows how much money is still in the account and to help you check for mistakes.

If you’re like most of us, the idea of doing financial reports is a bit scary. All that maths and those lists of numbers! The great thing about computers is that they can do most of the adding and sorting for you. The rest is mostly just a matter of keeping a list of where you want to spend the money, a list of where you really did spend the money, how much was received and making sure you don’t run out.

Breaking that Down:

    • Where you wanted to spend the money – this is called the budget, which is set up in the planning stage of the project before there is any money. That way, you know how much will be needed so that when applying for funding, you can tell the funders how you plan to spend their money. The budget helps to remind organisers how the money is supposed to be spent.
    • How much money you’ve spent (expenses) and how much you’ve received (income) – these are called the income and expense accounts. Each time money comes in, write it down on a separate line in the income sheet. Each time some money is spent, write a new line in the expenses sheet, saying what it was spent on.
    • Making sure you don’t run out – projects should also make a balance sheet, showing how much cash is in the bank and debts (like loans and unpaid bills etc.) It has a summary of the income and expenses of the month as well.

Sound tricky? Remember, the great thing about computers is that they can do a lot of the work for you, once you’ve planned your budget. To get you started, this toolkit includes a guide to putting your budget together.
Help Sheet – Creating a Budget (60 KB)

This toolkit also has a blank annual budget form or, if you prefer to do your finances one month at a time, a monthly budget.
Annual Budget  (347 KB)
One Month Budget (62 KB)

Both have built in instructions, a space to enter details about the money you have spent, a space for details about the money you have received and a balance sheet, which adds up your income and expenditure for each month.

To guide you through the forms, this toolkit has a help sheet to guide you through the income and expenses sheets, and one to help you understand the balance sheet. These help sheets are easiest to understand if you print them off, so you can look at them while you have the spreadsheet open on the computer in front of you.
Help Sheet – Understanding the Income and Expenditure Form (392 KB)
Help Sheet – Understanding a Balance Sheet (22 KB)

More Detailed Info

The Australian Tax Office keeps information on record keeping including details on how to record transactions, manage cash flow, develop electronic record keeping and provides sample copies of record keeping forms – https://www.ato.gov.au/

Our Community, a company that is set up to support community organisations, has a ‘policy bank’ of sample policies for non profit organisations of all sizes, including financial management policies – http://www.ourcommunity.com.au/boards/boards_article.jsp?articleId=1453#5