The next step in managing your not for profit bank accounts is to work out who should have access to them and how they will do it.

In an earlier post we talked about the possible need to have different bank accounts for the different needs of the organisation.  Today we consider who should have access to each of the accounts.

admin bandit software for not for profits and volunteer treasurers

Do you plan to use cheque books, access online or use credit cards?  Should everyone have the same access levels to each of those bank systems? Should Friar Tuck have access to all the money or only the food budget?

Here are some things to consider:

  • If using a cheque book decide whether you need one or two signatories.  The benefit of having two signatories is that there is a separation of duties.  Each signatory reviews and approves the transaction when they add their signature.  With larger not for profit organisations, one signatory may be from the finance department which processes the transaction.  The other signatory may be the operational person who knows the details about the transaction and is able to identify when a wrong amount has been charged or a transaction not approved.
  • Similar processes can be followed with online access.  One person processes the transaction and the second person reviews it prior to approval.
  • Often with smaller not for profit organisations the volunteer treasurer or staff member may process the transactions themselves, which is also acceptable as long as it is done within the appropriate delegations and spending limits.  If there is only one person approving the transactions then it might be a good idea to review a transaction listing for the month at each committee of management meeting.
  • With any accounts that can be accessed online, follow a similar process with account signatories.  Update the list of people who can access the accounts and make sure any old users are removed.  Also, as a security measure ensure passwords are changed on a regular basis and set limits in relation to amounts that can be approved online.  You might set a transaction limit or a daily limit.
  • Credit cards also need to be properly managed, so it is important to identify who has a credit card belonging to your not for profit, and what is the credit limit.  Check with the bank to obtain a list as credit cards that have been issued to people who are no longer associated with the organisation.  Also, ensure there are clear guidelines around the use of credit cards.  They are easy to use and easy to use incorrectly.

The other important issue is to ensure you reconcile the accounts each month.  Try to get into the routine of doing this on a regular basis.  If you are using our Admin Bandit accounting software then this can be done quickly.  By doing the reconciliation each month it won’t take up too much time.  It is much easier to identify and resolve a problem in the month it occurs rather than waiting until the end of the year or even for the auditor to ask a question with an issue that happened 12 months ago.

By now you should have a very clear idea of how each of the bank accounts work for your not for profit organisation and who is able to access them.  You should have clear controls over the accounts and that will help you to manage your finances properly.

Enjoy your new role as volunteer treasurer.