4 Finance Rules to Keep Your Organization Safe and Secure

Managing finances for a sports organization is no small feat. A recent article published by the Washington Post outlines just how easy it can be to lose thousands of dollars when your organization is not equipped to properly handle financial records.

Although managing a sports organization can be tough, there are several ways to make it easier, especially when it comes to financial oversight. The important thing to remember is one person should never handle all the finances on their own. Sharing the responsibility and segregating certain duties within your organization will help keep you accountable to manage the money in an efficient and ethical way. 

These are the basic financial rules to live by when starting or managing a sports organization:

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The Two-Signature Rule

It's imperative that you impose a two-signature rule on all organization bank accounts, whether they're physical checks or ACH virtual transactions. This way, you are not leaving full financial control to a single employee or volunteer.

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Set up an accounting system

Ditch the spreadsheets. Utilize QuickBooks or another simple system to ensure separation of duties regarding accounts payable, accounts receivable, and journal entries. 

Additionally, the staff member creating the journal entries at a sports organization should not be the one to post them. Always be sure another individual posts the journals to avoid issues arising when only one person has access to sign checks and make entries in the accounting system.

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Determine your annual budget

Having an annual budget allows the leadership of an organization to agree upon the revenues and expenses for the year. Following the determination of this budget, detailed financials should be presented at every board meeting. Especially in smaller organizations where there are not as many transactions, the details are important.

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Consider contracting an outside accounting firm

Depending on the size of your organization, it may be a good idea to have a public accounting firm perform an audit. Smaller organizations may be able to get by with a review or compilation of the financials, but in doing so, a third party should check the accuracy and integrity of the financials.  

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Are you a parent or guardian curious about how your organization is spending money?

It’s important to know that you are entitled to see how the finances are handled. Here are some things you can ask for:

• Nonprofit organizations should be filing tax Form 990 and making it public on their website. If you are a member of a nonprofit organization that does not have its Form 990 public on its site, you are in the right to demand access to that document.
• Members should also be able to view the annual report filed by many large nonprofits, illustrating where revenue comes from and where the money is being spent.
• Regarding for-profit organizations, it is reasonable for members to ask what their membership dues are used for and seek a high-level overview of the annual budget and P&L (profit and loss) for the year prior. 

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We know it’s a lot, but practicing safe and responsible financial habits is extremely important. Be sure to keep all these rules in mind when running your sports organization. Situations like what happened with the Bend FC Timbers are a lot more common than you might think.

Are you interested in stepping up your organization’s financial game? Players Health has officially opened early access to the private beta version of our upcoming financial services solution, specifically designed for youth sports organizations. Sign up HERE today.