Accounting involves a bookkeeping system that uses tax invoices, receipts, bill, cheques and other financial records.
Every club or association needs some kind of bookkeeping system to show how much was spent and received and what it was for and who authorised it. This should be recorded using invoices, receipts, bills, cheques and other financial records.
Cash accounting is the simplest form of bookkeeping. It uses the receipt book and bank deposit details to track income and the cheque book to track expenditure. When cash accounting, entries are recorded according to the date you paid someone or someone paid you. For example, if a club invoices someone, then they record the date they receive the money, rather than the date the sent the invoice.
An asset register allows for a club or association to keep track of its assets and provides a fair estimate of their worth. A club or association can start its asset register by recording all physical assets, regardless of the funding source. The types of physical assets that need to be recorded include:
- Office equipment
- Motor vehicles
- Communications systems
After that, each asset item needs to be checked at least once a year. As a general rule, each asset should be recorded separately and leased assets also need to be recorded.
Disposal of Assets
When a club or association disposes an asset – sell, give away or throw away – the asset register needs to be updated, including the date of disposal, the disposal amount and the method of disposal. When selling an asset, the proceeds need to be recorded in the financial records as well as the assets register.
Assets should not be deleted from the assets register until after the end of the financial year. At the beginning of the next financial year, disposal of assets should be recorded separately.