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Efficient Treasury Management

15 Jun

veerendra_pictureDear JCI Friends,

Greetings from the Local Treasurer.

I am sharing some of my treasury knowledge and experience with you people. I am to try my best to keep it simple and sweet so that even someone with little knowledge about treasury management can understand it. This article is adapted to the needs of NGOs.

Now let’s begin by defining treasury management: The dictionary defines the latter as “the administration of a company’s cash flow as well as the creation and governance of policies and procedures that ensure the company manages risk successfully.”

Before moving further, let’s elaborate on the key terms in the above definition within the context of an NGO.

1) Administration of a company’s cash flow:

Here, the “company” shall be replaced by a JCI chapter. Cash flow is basically “the total amount of money being transferred into and out of a business”. Within a JCI chapter, it refers to the revenues and costs incurred. The following table lists some of the main ones:

Revenues Costs
Membership Dues Rental and Cleaning of Secretariat
Aspiring Membership Dues JCI and NOM Dues
Sponsorship by members (expenses for which no claims are made to the organization) Business Cards
Banners
Marketing and Advertising
Sponsorship by partners (for which reports have to be submitted for use of funds and any remaining balance) President Grant
JCI Supplies, Gifts and Recognition
Telephone, Printing and Stationery
Donations by partners or senators (even if not required, a good practice is to still submit a report about use of funds) General Assemblies
Recruitment and Monthly Meetings
Bank Charges
Fund Raising Activities Conferences and Subsidies
Contingency

A suggestion to administer the cash flows is to prepare a budget of revenues and costs and a prudent technique is to overstate costs and understate revenues in doing so. Budgeting allows the Treasurer and Board to review their revenues and expenses over their year in office and ensure that cash flow is being kept under due control.

A quarterly review or better a monthly review is usually recommended to ensure that cash flow is within budget. Any consequent variations need to be investigated and discussed at the Board level and the latter may seek the advice of an experienced JCI member if the need arises.

Furthermore, the bank statement of the chapter remains a key indicator of its financial health and should be discussed at both Board and Members’ Meetings on a regular basis to ensure transparency and foster trust in the treasury management of the chapter.

One must not ignore that irrespective of the amount contributed by members and partners, finance remains a critical area and transparency can go a long way in fostering trust and better relations with JCI members and partners.

 
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