The volunteer treasurer of a nonprofit organisation has a number of significant duties to perform. Some of the most important involve the collection and safeguarding of the NFP’s financial information, and staying on top of the nonprofit’s financial position at all times by way of a treasurer’s report.

Of all of the individuals and stakeholders that are connected to a nonprofit, the treasurer is normally the sole person who truly has their finger on the financial pulse of the organisation. Boards typically rely on the treasurer to provide them with financial information that informs them of their organisation’s true financial condition, to support their deliberations and decision making

The Importance of the Monthly Treasurer’s Report

To fulfill their role of providing financial oversight, treasurers are tasked with compiling reports and presenting them to the board on a regular basis. While some boards only meet quarterly, most treasurers continue to prepare and send the treasurer’s report on a monthly basis.

The treasurer’s report should provide the board with the most up-to-date and accurate information about the nonprofit’s transactions and true current financial status. It should begin by listing the name of the organisation, and the period that is covered by the report. The following is a list of the remaining key items and information that every treasurer’s report should include.

Beginning Cash Balance

To gain a clear understanding of the impact of the current period’s financial transactions, the monthly treasurer’s report should begin by indicating the ending cash balance from the prior report. This balance should be in agreement with the balances that were obtained when the treasurer reconciled the nonprofit’s bank accounts from the last reporting period.

Transactions

The next two items on the report involve the financial transactions that occurred during the reporting period. These transactions should be broken into two separate categories for reporting purposes: income such as fees, revenues, rents and donations, and the expenses that were paid by the nonprofit.

Reporting income and expenses is not always as straightforward as you might assume. This section of the report is not simply a list of individual transaction that occurred during the reporting period.

The goal of each treasurer’s report is to convey financial information in a format that is easily understood by board members who are not accounting or bookkeeping experts. Most nonprofits have hundreds, if not thousands of transactions each month. Only significant transactions should be listed as line items, with smaller amounts being combined and reported under the heading of “other”.

The categories for income and expenses that are used in the monthly treasurer’s report to indicate line items and totals should match the same categories that are used for the nonprofit’s budget.

One way to simplify the presentation of this information, and increase its clarity, is to report net totals for significant items, such as a special event. For example, if your nonprofit held a charity fundraiser that raised a total of $10,000 in contributions from multiple donors, but, cost a combined total of $5,000 in supplies, equipment, rent, and work hours to throw, the treasurer has a few choices to make in how to present this information on the report. Each way is “correct”.

For example, the treasurer could calculate the “net” balance of the transactions for the event, and simply report the remaining balance in the appropriate category. In this instance, a treasurer using this method would list one line item for the fundraiser with a net entry to revenue for $5,000. If the totals had been reversed, and the event cost more to hold than it raised, the net entry of $5,000 would have been a single entry to expenses.

Other treasurers might list the total revenues and total expenses generated by the fundraiser as separate line items. In this instance, a single line item of $10,000 to revenues, and, another separate line item of $5,000 to expenses. Presenting the information in this format can make it easier for some board members to see at a glance just how worthwhile a given event was for the organisation.

Regardless of which reporting method is used, the treasurer should still create a separate, detailed report that provides more information about the event. In a report of this type, the revenues would be reported by category, with separate line items for large, individual donations. Expenses generated by the event would also be grouped together by category so that board members could easily see what types of transactions were involved, such as how much was spent on advertising and marketing for the event, or how much it cost in rental or catering fees to host the event.

Ending Cash Balance

Total income and expenses for the reporting period should be subtracted from the beginning cash balance and reported as the ending cash balance. The treasurer should complete the monthly bank reconciliation for the cash account(s) and then report the reconciled balance as the ending cash balance.

Once the ending cash balance is determined, the treasurer should also list any large, upcoming payments that the nonprofit expects to receive in the near future. Large bills that will need to be paid in the near future should also be listed. It is important to note that while these items should be included in the report, these amounts are not actually added to, or subtracted from, the ending cash balance, as the transactions, while expected, have not yet occurred.

The point of disclosing upcoming, expected transactions is to highlight the information to the board. Doing so can help them to be able to stick to their annual budget and avoid going over allotted amounts as well as help prevent them from disapproving a motion for an expense when funding that is earmarked for it may well be on the way.

In addition to determining the ending cash balance, and disclosing upcoming transactions of a large amount, treasurers need to be prepared to explain any discrepancies that have occurred between current expenses and income, and the nonprofit’s budget. Should this be for a large amount, it is part of the treasurer’s fiduciary duty to suggest alternative actions to correct the financial course of the nonprofit.

Presenting the Monthly Treasurer’s Report

Once complete, the monthly treasurer’s report should be signed by the treasurer and presented to the board, typically at the monthly board meeting. Ahead of the meeting, the treasurer should provide a copy of the report to each board member. The secretary or keeper of the minutes should also receive a copy of the report, as it will need to be included with the minutes of the meeting once they are prepared.

Once the presentation is complete, the treasurer should make themselves available to answer any questions from board members. Once all questions have been answered, the board will acknowledge the presentation by stating that the report has been filed.