Financial basics for your club

Good financial management helps ensure your club’s long-term sustainability, so you can keep providing the best experience to your members well into the future.

Financial management is not just the job of the treasurer - the entire management committee is accountable for the financial performance of your club. The treasurer may have day-to-day responsibility for managing the club’s money, but all management committee members share equal accountability for every financial decision. This is why payments made by not-for-profit clubs are required to be either approved or ratified at a management committee meeting.

The term ‘not-for-profit’ can be confusing, with many people believing that not-for-profit organisations are not allowed to turn a profit. However, any organisation that breaks even or operates at a loss annually will face sustainability challenges. ‘Not-for-profit’ simply means that surplus assets or profits cannot be distributed among members. Instead, these profits must be reinvested to fulfil the organisation’s objectives as outlined in its constitution.

This reinvestment could include the accumulation of funds in a bank account to secure your financial sustainability, or for reinvestment at a future date. It's important to recognise that a not-for-profit club operates as a business, and therefore, sound business principles should guide all financial decisions.

Financial basics resources

Financial terminology

A good understanding of financial terminology (PDF, 431.8 KB) will help ensure your club’s committee is familiar with basic financial terms. This ensures everyone is comfortable and understands what is being discussed, for example when you talk about money.

Financial safeguards

Simple financial safeguards (PDF, 882.2 KB) can protect your club’s money from accidental loss, theft, or fraud.

These include:

  • approving or ratifying all expenditure
  • requiring 2 people to co-authorise payments
  • keeping up-to-date financial records
  • supervising anyone handling cash
  • minimising cash handling
  • contacting recipients of large amounts prior to making payment
  • supporting anyone to speak up early if something doesn’t feel right.

Because every management committee member needs to stay informed about your club’s financial position, keep an eye out for red flags, such as:

  • an unexpected drop in revenue or dramatic increase in costs
  • continually using the same suppliers without inviting other suppliers to quote
  • committee members using their own bank accounts rather than using the club’s payment methods
  • money appearing without a clear source
  • vague answers to questions about the club’s financial situation.

Asking good questions is crucial for every committee member's role in financial management.  It's important to ask questions that challenge assumptions, clarify information, and promote transparency. Good questions can help committee members identify potential risks and opportunities and make informed financial decisions.

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Strong financial management is the key to your club's sustainability, ensuring that members can enjoy what you provide for years to come.

In this video, we’re going to cover the basics of financial management.

Financial management is not just the job of the treasurer - the entire management committee is accountable for the financial performance of your club. The treasurer may have day-to-day responsibility for managing the club’s money, but all management committee members share equal accountability for every financial decision.

Therefore this video provides practical advice for ALL committee members.

Consider these questions before we begin:

  • What does 'not-for-profit' really mean?
  • Which financial 'red flags' should you be vigilant about?
  • Are you aware of your club's GST obligations?

Not-for-profit doesn't mean you can’t make money. Instead, it means surplus funds are reinvested into the club, not distributed among members. It's about ensuring every dollar advances your mission, as outlined in your constitution. This could mean saving up for big goals or co-contributing towards a grant-funded project.

So when we say 'not-for-profit,' it means the club uses the money it makes for what's best for the club.

That's why the committee has to approve expenditure. It's not up to just one person, even the president or treasurer, to decide on spending. The committee must agree first, to make sure it's a smart move for the club.

If the committee legitimately needs to spend money in a hurry, say if a fridge breaks down and needs to be repaired before the food spoils, they can make the emergency payment, and then gain retrospective approval of the payment – this is known as ratifying payments.

This process of approving expenses also helps to protect your club against fraud.

There are a number of other safeguards you can use to protect your club’s money against accidental loss, theft or fraud.

These include:

  • Requiring two people to authorise payments
  • Keeping up-to-date financial records
  • Supervising anyone handling cash
  • Minimising cash handling by using electronic payments where you can
  • Contacting recipients of large amounts before transferring funds
  • And supporting members to speak up early if anything doesn’t quite feel right

You can also keep an eye out for financial ‘red flags’, such as:

  • An unexpected drop in revenue or dramatic increase in costs
  • Continually using the same supplier year-on-year without inviting other suppliers to quote
  • Committee members using their own bank accounts rather than using the club’s payment methods
  • Money showing up without knowing where it came from
  • Or vague answers to questions about the club’s financial situation

Asking regular, discerning questions about the club’s finances is not just a right of committee members - it’s their duty.

By challenging assumptions and seeking clarity, you ensure your club's funds are protected and wisely managed. Remember, the only foolish question is the one you don’t ask!

A good understanding of financial terminology will help you ask good questions and ensure you’re all on the same page when you talk about money.

Here are some common terms:

  • Goods and Services Tax or GST is a 10% tax that applies to most goods or services sold in Australia. As a not-for-profit you need to register for GST if the club’s turnover is $150,000 or over (which is double the threshold for a for-profit business).
  • Assets are all of the things that your club owns that will be used to generate income. This includes money in the bank, your equipment and your facilities.
  • Liabilities are all of the money that the club owes - your debts.

Assets and liabilities are divided into current and non-current.

Current assets include cash, or assets that you expect to convert to cash within a year, such as selling stock or merchandise. Non-current assets include equipment that you expect to still own in more than a year.

Likewise, current liabilities are debts due within a year and non-current liabilities include longer-term loans.

Financial stewardship is a team effort. By equipping yourselves with knowledge and actively participating in financial governance, you’re not just protecting your club's assets; you're setting the stage for a thriving, community-driven future.

More information

  • Read the Office of Fair Trading's information on starting and operating an incorporated association in Queensland.
  • Create a free account to access the Australian Sport’s Commission GamePlan online platform of resources, for sporting clubs of all sizes, designed to support club development.
  • Learn about tax essentials, record keeping, superannuation and more through the Australian Tax Office's free, online learning platform.
  • A business name is the name you are using to conduct business under or want to trade as.