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There are certain requirements that must be met to keep an agricultural society in good standing under the Agricultural Societies Act. However, fulfilling these requirements should not be your only reason for maintaining good records. Good records will help your agricultural society fulfill its long term objectives and plans, as well as maintain a good standing within your community. You will probably be the main contact for grant applications, so good financial management skills are essential.
- Involves keeping a record of all financial transactions
The entire board of the agricultural society is responsible for its financial management. The treasurer is responsible for providing all the details so that decisions are based on the best and most complete information available.
- Involved with planning, budgeting and all the decision making that is required to keep your organization functioning.
Where do you start?
- Review the most recent years' financial statements and reports and ask questions of the past treasurer and directors
- Ask the previous treasurer and your program consultant from Alberta Agriculture, Food and Rural Development about what reporting requirements your agricultural society may have to meet each year
- Review the requirements of the Agricultural Societies Act. Each year the agricultural society is responsible for submitting year end reports which include complete financial statements, prepared by an accountant
- Develop a list of all grants regularly received. Ensure that you have copies of those applications from the previous year and that all accounting requirements have been met
- Develop a calendar of all important filing dates for applications and information
- Clearly identify any long term debt payments and the dates when these amounts are due. The treasurer is responsible to keep track of longer term debts and any annual payments to lenders. This obligation means keeping track of the yearly payments and interest charges
Setting up bank accounts
When setting up bank accounts, you should earn interest wherever possible. Consider these other factors when setting up accounts.
Once you understand these circumstances, including the quantity and flow of funds, discuss your options with your bank manager.
- Special requirements for any separate bank accounts
- Monthly operating costs
- How many cheques are written monthly and yearly?
Develop a filing system
Cheque books and paying bills and invoices
- The goal of your filing system should be to safely store the "proof" of each financial transaction
- It should be kept simple and should allow for easy retrieval of information
- When developing files, restrict yourself to those that are most useful to your society
Reconciling a bank account
- When writing cheques, put the invoice number on the cheque and the cheque number on the invoice for cross-referencing
- Signing authority should be issued to a limited few and authorized in the minutes of the society
- There should be a minimum of two signatures on each cheque. Doing this will protect the volunteers and your agricultural society from any potential loss
- Always fill in the "Pay to the Order" section of the cheque before signing it
- Pay all bills or invoices by cheque as promptly as possible to avoid interest charges. Pay the amount on invoices, not statements, and check for accuracy because there may be differences
- Write VOID on any cheques returned uncashed or with mistakes on them
- A motion should be made and passed before the bills are paid
- Have the cheque completely filled out before attaching the two signatures. Bring cheques to your executive or regular meetings ready for another signature once a motion has been passed to pay them
- When the bank statement is received, check it against your synoptic journal or ledger to ensure accuracy
- Check the back of the bank statement for the method of preparing a bank reconciliation
Preparing for the annual meeting
- At every regular meeting, the treasurer will provide an up-to-date accounting of all funds of the agricultural society
- Any upcoming events or purchases that will be made should receive direction through a motion from the agricultural society to make these expenditures. Any outstanding bills should be presented and a motion passed to ensure payment
The treasurer should provide:
It is important to note the requirements to keep an agricultural society in good standing under the Agricultural Societies Act.
- Statement of Cash Receipts and Expenditures
- Balance Sheet
- Proposed Budget for the next year
- Accurate books and records balance to the year-end
Financial statements reviewed by a designated accountant should be sent to Alberta Agriculture, Food and Rural Development, Agricultural Societies Program in Edmonton by January 15 of the following year. If your records have been kept up to date, meeting these requirements should be easy.
Developing a budget will keep your agricultural society on track for the year ahead. A budget is often a best guess scenario but should help the agricultural society develop long range plans that are essential.
A budget is a financial plan for one year and shows the income and expenditures of the agricultural society. It must always relate to the mission and plans of the society. The directors should be closely involved in the preparation of the budget.
Steps to develop a budget
1. Make a list of activities
Sources of information
2. Determine costs
- List the things you must do in the year ahead and the things the society wishes to do in the year ahead, without considering costs.
3. Determine income
- Decide the cost of Step 1
- Include all possible expense items and basic operating costs
- Refer to costs from previous year
4. Compare income and costs
- Estimate the realistic income from all sources (be aware of restrictions on some sources of income)
- Allocate restricted income to the proper expense category, unrestricted income to basic administrative expenses and the balance of income to other expense items
5. Set priorities
- Have you estimated enough income to equal the estimated expenses?
- Are there adjustments to planned activities that will balance the budget?
6. Balance the budget
- Make choices on what is important to do in relation to the society's mission and goals
- Make decisions on "real priorities", not special interests
7. Approve the budget
- This step reflects the decisions made in the first five steps
8. Monitor the budget
- Present the budget to the Board of Directors for review, discussion, revision and approval
- Throughout the year, review the budget and revise as necessary (this is a key responsibility of the Board of Directors).
- An annual budget can be an important guidepost to the society on how the financial plan for the year compares with reality as the year progresses.
- The information in the records is the best source for the treasurer. Most societies have recognized that things cost more each year so plan accordingly.
- Budgets may bring about some important decisions regarding priority spending.
- The treasurer provides the background information, but the directional decisions must be done within the agricultural society general membership and be consistent with the goals and objectives.
- The Agricultural Societies Program staff of Alberta Agriculture, Food and Rural Development. Our job is to help agricultural societies
- An Accountant - When they review your records, they can make good suggestions
- Bank Manager - These people should provide information on the best way to invest your money and the options available
- Other community groups and their treasurers
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