Accounts/Budgets/Forecasts - Overall
1. Why do we need to keep financial information?
a. It is important to keep accurate financial records for Club administration as well as for audit and tax purposes. The accounts will inform the Club of its financial position and be used to audit or review the Club’s statements at year end. Up-to-date and transparent accounts are particularly important if the Club is incorporated, is a charity or is seeking to apply for funding.
2. What are the key financials that we need to prepare?
a. Bookkeeping, including a detailed cashbook and bank reconciliation
b. Annual Financial Accounts – Summary income and expenditure account (from cashbook) plus balance sheet
c. Annual budget and cashflow forecast (see Budgets and Forecasts section)
3. How can I generate funds/raise money?
a. There are many ways that a Club can generate funds, including Club Fundraising activities, grant applications and sponsorship.
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Accounts
1. How detailed should our accounts be?
a. This will depend on the size, requirements and circumstances of the Club.
2. How detailed should our cashbook be?
a. The cashbook should reflect your cash and bank movements.
3. How often should I prepare them?
a. This will depend on the size, requirements and circumstances of the Club.
4. Who should prepare them?
a. It is advised that your Club has a dedicated Treasurer to have overall responsibility for preparation of the account. This may be a volunteer who has some previous financial experience. Larger clubs may pay a part-time bookkeeper or accountant.
5. Do we need an auditor?
a. Audit (or a review of your accounts by an appropriate independent person) provides your members with an assurance that the Club has effective stewardship. It is likely that if you are not a very large club your Club will not need a full, statutory audit. Please see the following links to check if your Club is required to have a statutory audit:
FRSSE Charity Commission requirements
Small and Medium company thresholds SME thresholds
Budgets and Forecasts
1. What are they used for/how can they help me?
a. It is important to set and monitor at least a basic budget. Budgets mean that you tell the Club’s money where to go, rather than wondering where it went, and help reduce uncertainty in the future.
2. How detailed should they be?
a. This will be determined by the Club’s requirements. It is often beneficial to align your budget categories to the accounts categories and therefore the budget will tend to be a similar level of detail as your accounts.
3. How often should I prepare them?
a. A budget is usually prepared annually, but can also be broken down by month for those that want to provide more detail. The budget should be reviewed regularly throughout the year, ideally every quarter, by the Club’s Committee to identify and document any large variances against the budget. A separate budget may also be prepared if the club is looking to save for something, like an upcoming capital development, and should be prepared well in advance of the project.
4. Who should prepare the budget?
a. The Treasurer will prepare the budget but will need to discuss the Club’s activity for the year with the Club’s Committee. It is essential to understand what income the Club expects to receive during the year, which in turn will provide an indication of how much the Club will have to spend in the year. These discussions should be a standing agenda item at the Club Committee meeting.
5. Can I see an example?
a. Yes, we have attached an example and basic template budget that you can adapt: Template accounts for a cricket club
6. How do I prepare a budget?
a. The Treasurer will need to complete this with input from Club Committee members and key operational staff, such as Groundsmen and Team Managers. As well as looking backwards at previous year statements, you will need to think of other potential income and expenditure. It is a good idea to review where you think income could possibly be increased, or expenditure cut back. If at all possible, try and build in some contingency for any unforeseen expenditure. At the end of the process you will have a good idea where the club will be financially in a year’s time, which will aid planning and decision making.
7. How far in advance should I plan?
a. A Club should set a budget for at least the upcoming financial year. A Club should also ensure that they plan for the long term – see the Financial Planning section. This ensures that they factor in large items of expenditure, such as replacement machinery and capital projects. This may include setting aside a specific amount each year in a sinking fund, to cover future expenditure.
8. What is a cash flow forecast?
a. Cash flow forecasts are a critical financial management tool and are important to prevent a Club running out of cash.
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Business Planning
1. What is a Business Plan?
a. A Business Plan should set out where you see your Club in the future and how you plan to achieve your goals. It is often used as a way of communicating to all stakeholders (internal and external partners) and can be an integral part of showcasing the Club to potential funders.
2. What should a business plan include?
A summary of the current status of the Club and key risks– activities, people, finances
Objectives detailing where the Club would like to be in the future e.g. number of members, teams, diversity of teams, use of facilities (club and external), and any expansion plans such as including a girls team, hosting functions.
A strategy detailing how you are going to achieve your objectives – what do you need to do, who do you need to help?
Timelines
Financial plan supporting your Club targets (see long term forecasting)
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Financial Planning
1. In what situation do we need a financial plan?
a. Principally to help you achieve goals set out in your business plan. Your goal may just be “to continue as we are”, but it is likely that even this will require longer term planning to achieve this. A detailed financial plan is also essential if the Club is looking to apply for funding applications or commence a facility development.
2. What is a Financial Plan?
a. It is a medium to long term plan setting out the Club’s finances, and can forecast as far out as 5 years. It should be an extended version of your annual budgets and forecasts. Ideally the Financial Plan should be completed on a rolling basis and approved annually by the Club Committee. It will set out the financial forecasts that support the objectives in the Club Business or Development Plan.
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Controls
1. What are financial controls?
a. Financial controls are checks and procedures that safeguard the Club’s assets, ensure good quality financial information is available and help identify and manage risk. Strong financial controls can help reduce risk of fraud and error (particularly in cash business). Checks on these basic controls, if done regularly, may act as a warning of anything potentially wrong with the system.
2. What are the main controls a Club should implement?
a. Clubs will need to determine which controls they need, though there will be some essential controls, e.g records of cash and cheques received agree with bank paying-in slips. The Sport and Recreation Alliance has a SRA Financial Procedures Manual. It is advisable to always have two people involved when dealing with cash, to ensure you can verify amounts and reduce the scope for malpractice.
3. What is a bank reconciliation?
a. Preparing a bank reconciliation is the process of matching and balancing figures in the accounting records with those expressed on a bank statement. There may be unpresented cheques (that the club has issued but the receiver of that cheque has not yet banked it, and vice versa). An example of bank reconciliation has been provided: Template accounts for a cricket club (53 KB)
4. What is the role of a treasurer?
a. Even if the Club pays a bookkeeper, the Treasurer will have overall responsibility for the Club’s finances. They will:
maintain records for all financial transactions;
prepare the financial statements at year-end to be audited and arrange the audit;
present an end-of-year financial report to the Club’s AGM, as well as reporting regularly to the committee on the Club’s financial position;
collect subscriptions from members and another money due to the Club, plus issuing receipts for all money received where relevant;
pay bills promptly and ensuring that funds are spent properly;
financial planning including producing an annual budget and monitoring it throughout the year (including forecasting the Club’s projected income/expenditure and updating as necessary);
where relevant, help to prepare/submit any statutory documents that are required, for example tax returns, PAYE and NI returns, VAT returns and grant aid reports.
ECB’s Clubmark process provides a template to use as a role description at ECB Clubmark process.
5. What skills/qualities should a good treasurer have?
a. Ideally the Treasurer will have previous experience of managing finance. They should be well-organised, motivated, have sufficient time to carry out the role and keep good records. They should be confident dealing with money (including careful cash-handling and banking), be able to make decisions for the financial good of the Club. Club members should feel confident in the Treasurer’s ability, honesty and knowledge.
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Business Risk Management
1. What is a risk assessment?
a. A risk assessment in this context is an exercise undertaken by the club to determine risks and threats to the Club and its functions. Probability and impact are both used to determine the severity of the threat to the Club’s operations.
2. What are the main issues to consider?
a. You can use traditional “SWOT” analysis; strengths, weaknesses, opportunities and threats to the club e.g. What is the Club good at, financially, and where could it improve (or mitigate)? Opportunities can be negative as well, so is there a risk of any missed financial opportunities e.g missing out on sponsorship to the local rugby club. To be most effective, it should be a formal process including an audit of your current position.
3. What level of reserves should I have?
a. Reserves or savings are held to help the Club operate effectively in the future. These reserves may be unrestricted (can be used for any purpose related to the Club) or restricted (ringfenced money to be used for a specific purpose, e.g. a legacy prescribing how the money should be spent, or specific funding from a funding body). The committee should consider a reserves policy which will differ from Club to Club. This policy and the current level of reserves should be kept under review.
b. Clubs must strike their own balance between setting money aside for unanticipated expenditure and holding too much in reserve.
c. Types of Reserves - Sinking fund used to replace assets in future, Unrestricted funds to be used for any purpose (though good practice to not use the fund for regular operational expenditure else it will deplete rapidly), rainy day fund for unforeseen expenditure
d. Self-insurance. Clubs may be unable to take out insurance in certain situations (i.e. if they are on a flood plain) and choose to have a savings fund to cover themselves against the potential future loss. Clubs still need to ensure they are appropriately insured in most areas.
4. What do we need to consider regarding insurance?
a. Clubs need to ensure that they consider what the correct level of insurance should be for their assets and activities and risks and how they insure against them.
One of the largest risks for Clubs that hold assets is under-insurance of buildings and contents, therefore Clubs should check that the current level of insurance reflects the most up to date replacement value – note that replacement value may be very different now than at its last valuation.
ECB Clubmark requires a minimum level of £5m Public Liability Insurance. Your Club should have Employer’s Liability Insurance if it employs any staff.
5. Does ECB provide any insurance for cricket clubs?
a. The ECB has worked with insurer Marshall Woolridge to agree a package, Extra Cover, for Cricket Clubs to take up if they choose. More information can be found here. Clubs are, however, welcome to look for their own insurance and deal with this issue independently.
