Finance committees are also often charged with ensuring compliance and/or developing other policies that further serve to protect the organization and manage its exposure to risk. These include establishing policies for:
Finance Committee responsibilities relating to reporting and monitoring include:
1. Develop useful and readable report formats with staff. 2. Work with staff to develop a list of desired reports noting the level of detail, frequency, deadlines, and recipients of these reports. 3. Work with staff to understand the implications of the reports. 4. Present the financial reports and communicate the implications to the full board. 5. Monitor cash flow and ensure adequate resources are available for day-to-day operations (working capital) and mission accomplishment.
There are many payroll services that will process the regular payroll, make direct deposits, prepare quarterly and annual tax filings and remit taxes due for a very reasonable fee.
The finance committee chair is most often the board treasurer, whose specific duties are usually described in the organization’s bylaws. In practice, these duties can vary considerably from a hands-on role, in the case of the “working board” model, to a more supervisory role where transactions are largely handled by staff.
The chair of the finance committee makes sure the committee does its job. Specific duties of the chair include:
Processing the request for payment is the same whether writing checks or making wire transfers or ACH (online) payments. However, the method of making the payment differs.
When making a wire transfer or ACH payment, all documentation and authorizations necessary for any disbursement should be obtained prior to making the transfer. Further, a form should be developed that can be completed by the vendor showing:
How much cash do we have? How much cash will we have? Is there a point where we may run out? What can we do about it now? These are questions an organization’s board and management will be able to address if they make the effort to budget for and project cash flows.
Good internal reports are accurate, timely, and readable. They present relevant financial information, with enough context (numeric data, comparatives, projections, and narrative) to promote a thorough understanding of your status, and what actions may need to be taken.
Formatting reports for maximum readability is an important consideration that is often overlooked. Be kind to your audiences: board members, finance committee members, staff managers, or other stakeholders will appreciate it if you follow the formatting tips below:
