Guidance

Introduction

Your first stop for advice or assistance with financial matters is the LALG Treasurer.

  • Groups should be self-financing.
  • However, the LALG Committee may give up to £50 for initial set up or other exceptional costs.
  • Appoint a treasurer and set up a simple method of keeping track of income and expenditure. 
  • If significant sums are involved, open a bank account. Many banks and building societies offer a “Treasurer’s Account” or similar which is aimed at small groups.
  • Alternatively you can ask the Treasurer to handle the money. Have cheques made payable to “LALG” with the group or event name on back.
  • If you plan an activity outside the usual for the group, please speak to the Treasurer if additional funds might be needed.  If agreed you will be asked to complete a summary sheet and return it with receipts. 
  • All groups’ financial records are subject to scrutiny by the Treasurer if requested.
  • Money held by a group must be donated to central LALG funds if the group closes.
  • If a group closes temporarily the Treasurer will retain any funds until the group restarts.

Record Keeping

LALG groups will differ in their record keeping requirements and some groups will have no need for any at all!   If you take subscriptions or other financial contributions from your group, you will need some way of accounting for them.  This enables you to keep track of how the money you have collected has been spent and to avoid the group running into financial difficulties.  You may wish to appoint a treasurer who does this on the group’s behalf.

Simple Accounting

Groups that simply collect a small sum from participants each meeting and use it to pay the expenses for that meeting need nothing more than a record of income and expenditure.  This might be in a notebook or you can set up a simple recording system on your computer. For example:

Date

Details

Income

Expenditure

Balance

1/4/18

Brought forward kitty

£3.50

 

£3.50

13/4/18

April meeting dues - 6 members at £2 each

£12.00

 

£15.50

13/4/18

Room hire

 

£11.00

£4.50

13/4/18

Refreshments

 

£3.00

£1.50

15/5/18

May meeting dues – 10 members at £2 each

£20.00

 

£21.50

15/5/18

Room hire

 

£11.00

£10.50

15/5/18

Refreshments

 

£5.00

£5.50

8/6/18

May meeting dues – 9 members at £2 each

£18.00

 

£23.50

8/6/18

Room hire

 

£11.00

£12.50

8/6/18

Refreshments

 

£4.50

£8.00

This way you can always see what balance you should have in your kitty and adjust what members pay accordingly.

But if your group shares costs over the medium or longer term, for example to hire a sports facility for a few weeks, then it is wise to ask members to make a non-refundable payment up front so that the organiser does not risk being left out of pocket if members do not attend regularly.   For example:

Date

Details

Income

Expenditure

Balance

1/4/18

Brought forward kitty

£3.50

 

£3.50

1/4/18

Subs from:

Ann

Bob

Carol

Dan

Ellen

etc.

8 at £33 each

£264.00

 

£267.50

1/4/18

Court hire 1 Apr -30 Jun (10 sessions at £26)

 

£260.00

£7.50

1/7/18

 Subs from:

Ann

Bob

Carol

Dan

Ellen

etc

8 at £33 each

£264.00

 

£271.50

1/7/18

Court hire  1 Jul -30 Sep (10 sessions at £26)

 

£260.00

£11.50

This way you can always see what balance you should have in your kitty and adjust what members pay accordingly.

It is good practice to show the income and expenditure at least once a year to members of the group.   At the same time the group can decide whether any changes are needed to the amount collected.

Running activities that require budgeting, prepayments, contractual arrangements and where variable numbers may attend.

Some LALG activities such as trips or events with speakers require more detailed accounting.   Such activities will normally have several costs for example hire of hall or coach, speaker or guide expenses and entrance fees.

  • The first step is to establish all the costs of running that activity.  When do you have to pay?  Is anything refundable if someone can’t come?
  • The second step is to establish the total number who can attend – there may for example be a limit to seats on a coach, the number in a tour group or the number who can be accommodated at the venue.
  • The third step is to estimate how many people are likely to go.  You may have evidence from previous trips or you can speak to someone who has run such activities in the past.  Be cautious in your estimates.
  • The fourth step is to prepare a budget.

Example 1

  • You are going to hire a hall which costs £50 and engage a speaker at the cost of £75.  There will be tea, coffee and biscuits at a cost of £25 which you have decided to include in the price of the ticket.  The capacity of the hall is 100 people, but you think only about 50 will come.
  • The costs of the event are £50 + £75 + £25 making a total of £150, if you sell 50 tickets for £3 you will cover your costs. 
  • If you decide to offer concessions perhaps to children, seniors or LALG members you will need to factor that into your ticket prices.  For example if you think there will be 10 children and 10 members at a discounted price of £2 (that’s an income of £40), the remaining 30 tickets will have to cover £110 so each of those tickets will have to be around £3.70 – or you may decide to round this up to £4 so you have a small contingency in case not all tickets are sold.
  • Remember that LALG will not be able to underwrite any loss you make so start collecting ticket income well before the time when you have to pay a non-refundable hall or coach hire for example.
  • You need to know for certain – from ticket sales – that the activity is going to be viable, before you make any non-refundable payments.
  • If your event makes a profit you are asked to temporarily or permanently give this to the treasurer of LALG.

Example 2

  • You are planning a trip by public transport, people will buy their own train tickets.   There is group entry fee of £20 each person payable at the gate with a maximum of 30 people.  You decide to hire a guide which costs £150 for the whole group, payable in advance and not refundable.   Although the maximum group size is 30 you decide only 25 people will sign up.
  • The upfront cost for the guide is £150 divided by 25 so the non-refundable deposit needed to secure a place is £6.  The entrance fee is £20 each.  There are now options.  You can ask for people to pay in advance and have the money ready to hand over at the gate or you can collect the cash during the journey.  You need to check in advance what payment methods the venue accepts. Because the entrance fee is only payable if you go in it can be refunded to those who cannot go and who have paid in advance.

Money handling options

  • The LALG Treasurer can help by handling the money for you and you should make contact well in advance to agree what needs to be done.
  • You can open a bank account in your name purely for LALG activities and use that to manage the event, recording the income and expenditure and keeping a record of who has paid what.
  • If you use a bank account, either LALG’s or one you have set up, you can collect money by bank transfer which is clearly easiest. Make sure payments in are recorded with the payer’s name. 
  • Alternatively, payment can be made by cheque sent to you at home or collected by Discover Letchworth. Make sure you leave enough time before the event for cheques to be collected, paid in and cleared so you have sufficient money on the day.
  • You can ask people to pay in cash on the day but there are risks associated with handling cash in a public place.  You will need to decide what to do if someone hands you a cheque on the day!

Finally

  • Do a reconciliation of amounts received with expenses paid, hopefully these will balance.  Repay any sums collected in advance which were not needed, for example entrance fees.   If you are in profit you may consider repaying any non-refundable deposits on an ex gratia basis.
  • Any positive balance may go forward to the next LALG event that you run as a contingency. 
  • But if you cease to run such activities any surplus remaining should be paid to LALG central funds.
 

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