AccountsReady: Simple Steps to Modern Financial Management

Simple Steps to Modern Financial Management

For many Youth, Community & Sporting Organisations financial management can be a struggle, especially if you are relying on volunteers.  It can be daunting to start the process of revamping how you manage your organisations money, so let’s look at how this can be done…

Step 1 – Setting up online banking

There are still organisations who are not set up for online banking, this is essential for modernisation of any organisation.  It provides the organisation with the ability to view transactions on bank account(s), download bank statements, set up new suppliers and make electronic payments. 

If your organisation has a board/ committee or management structure which requires payments to be approved, modern online banking systems allow for a 2 stage approval approach.

One authorised person adds the details of the payment, and another authorises the payment to complete.  This means you are assured that only authorised payments are processed.

Your organisation chooses who is given access to your accounts as part of the online banking set up process and what level of access they have – for example view only, approved to add suppliers, make payments etc.

Once online banking is set up and operating, we turn to the next stage in updating financial management -  how do we use the information we have available to better understand our financial position and make decisions.

Step 2 – Choosing a Software System for Financial Management

Getting simple & robust systems in place to support financial management is critical and new software & technologies are providing ways to do this. 

So many organisations are still using basic excel spreadsheets to track income and expenditure.  This can be very time consuming, often relaying on a specific staff member or volunteer to manually keep track of the money in and out of the account(s).

For groups who receive funding, they are also manually monitoring which account transactions are attributed to the various funding streams. 

At AccountReady, we are a Xero Certified Partner and recommend this as our preferred software for organisations to manage, understand & report on their finances in an efficient and user friendly way – saving time and often saving money!

Step 3 – Getting set up 

Xero can connect directly to your organisation online banking, allowing the software system to see the transactions that are going in & out of your account(s). 

This is a secure view only integration, Xero has no access to the actual bank account itself to makes any changes or process any payments.

Once connected, it’s time to set up the different type of income & expenditure categories.  This could be organisation core funders or other regular sources of income, for example donations, membership fees, rental income, payment for services/ products your organisation provides.

You would also add the details of suppliers that your organisation pays on a regular basis – electricity, rent, rates, transport costs, room hire, transport costs,

At Accountsready, we do this process for our clients as part of our onboarding process.  We ensure that the system is set up to suit each organisation and make any changes needed as you get familiar with the system.   

Step 4 – Getting paid

Modern software systems such as Xero, give organisations the ability to generate & issue invoices to relevant parties at the touch of a button.  Adding the organisation who you are invoicing as a customer and creating the required invoice can take as little as two minutes. 

Once on the system, that customer can have further invoices generated and issued within 30 seconds! As well as having recurrent invoices issued on a regular basis for example weekly or monthly services charges – these can go automatically without a member of your organisation needing to do any additional work!

Xero can send payment reminders when invoices are due to be paid & overdue for payment, encouraging prompt payments.  Again, this can be done automatically and can be set up as part of the onboarding process with Accountsready.

At the click of a button, you can also see which invoices are still due to be paid, helping your organisation to see clearly income that is due to your organisation.

Step 5 – Paying your bills

Youth, Community & Sporting organisations have a wide range of financial obligations, with some having minimal regular bills and others with extensive monthly & quarterly commitments.

Keeping track of paper and now often online bills being received for an organisation can be an admin burden. 

Xero provides the option to send bills received, directly to your Xero account, adding them to the list of payments your organisation is due to make and filing the bill away for accounting & auditing purposes.

Bills coming through on email and be forwarded, whilst those arriving by post can be scanned or photographed and sent to Xero.

For organisations who make payments in cash or via an organisation card, you can also send scanned copies or photographs of receipts directly to xero.  Again, this is useful for accounting & auditing purposes and is a safe & secure facility for storing your financial information.

Step 6 – A better understanding

With all the online banking transactions connected to your organisation clearly visible on Xero, your organisation can reconcile incoming payments & outgoing expenditure – Xero will even make suggestions based on the different categories you have added to the system during the set-up process.

This means you can see easily how much money has come in from your various sources over a period of time and how it is being spent. 

For example – you can choose to scrutinise the incoming payments from a specific funder to confirm that the full grant has been received – this is easily done by clicking to that funder, which will display each time they have made a payment that has been confirmed & reconciled as coming from them.

For expenditure, you can look at how much you have spent on a specific category or funding stream.  For example – looking at electricity costs over a year, you will see each transaction and the total cost.  This may help your organisation decide if you want to move provider or negotiate a new tariff to try to reduce costs.

For a funding stream, you can isolate and review the amount of funding spent against the funders budget headings, supporting your organisation to seamlessly stay within the budget available and ensure the grant is fully utilised.

This is a much more efficient method of tracking grant expenditure, especially when measured against manual tracking with the use of spreadsheets – it also reduces the risk of human error.

Step 7 – Reporting

Through Xero you can develop regular financial reports such as profit & loss, management accounts and progress against budget, through is a much more straightforward process.

 Again, it reduces the time spent gathering bank statements and summarising the information to provide a picture of how your organisation is performing financially.

Reports can be generated within minutes and can be tailored to reflect the type of information your need to share with management boards, committees, funders.

Accountsready can support your organisation to decide what reports will work best and ensure that you can run a report when needed – or we can do it for you!

Step 8 – Payroll, PAYE & VAT

Many organisations have an external company who operate payroll on their behalf. The main challenge with this set up, can be getting access to payroll information when you need it or the ability to make changes for your team.

Accountsready recommend Xero for the operation of payroll as it allows you as the organisation to have instant access to information for all staff, past & present.  This means you can update staff details such as tax code, address, marital status at the click of a few buttons.  No need to send off info to an external company.

You can gather payroll information such as P11’s & P32’s often required by funders, who are covering salary costs.  Staff are provided with access to their own Xero – Xero Me, where they can access their payslips through a secure online sign in.

Xero can connect to your organisation HMRC account to enable you to confirm any PAYE and VAT (where appropriate) payments due to be made and set these up for direct debit.  Ensuring that your organisation is meeting any HMRC deadlines, reducing the risk of penalties.

Accountsready can support an organisation to set up and process their own monthly payroll or we can process it on your behalf as part of our Core+ & bespoke packages.

Step 9 – Annual Accounts

Organisations are established and/ or constituted in a variety of ways.  This often determines if they are required to develop annual accounts, the level of detail required and to whom they need to be filed or submitted.

Annual accounts are designed to provide a comprehensive overview of your organisation’s financial activity for the year and an understanding of your financial sustainability.

Preparation for annual accounts can be a challenging process - ensuring that your organisation has all of the information collated and available to review. 

Using Xero software, this information is already at your finger-tips meaning there is minimal work required from your organisation to have your accounts developed.

For some organisations, accounts can be generated directly from the Xero system (by an appropriately qualified Accountant).  

All of which means you will never miss a filing or submission deadline!

Working alongside Accountsready, we can support your organisation through these simple steps, modernising your financial management processes. 

Supporting you to have accurate, up to date financial information available for decision making, reporting and demonstrating good practice to potential funders & partners.

For more information: www.s3solutions.co.uk/accountsready

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