Is Finance Not Your Friend? Quick tips to Help Keep Your Chapters at the Top of their Game
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18 de Aug de 2016•0 gostou•413 visualizações
Is Finance Not Your Friend? Quick tips to Help Keep Your Chapters at the Top of their Game
18 de Aug de 2016•0 gostou•413 visualizações
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Not everyone is a finance whiz, but when working with collegiate members, it is important to have some level of knowledge regarding the data and information surrounding chapters. Our session outlines five metrics that field staff can look for to quickly gain an overview of a chapter’s financial health. By having this knowledge, field staff can proactively get ahead of any potential financial issues and keep chapters on track. Our presentation will be delivered in a chronological sequence that aligns with the seasonality of chapters and what is most important at a given time. Presenter: Erin Morris, Billhighway Client Relations Specialist Originally presented on July 18, 2016 at the FEA Field Staff Conference
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Is Finance Not Your Friend? Quick tips to Help Keep Your Chapters at the Top of their Game
- 1. Making Finances Your Friend Quick Tips to Help Keep Your Chapters at the Top of their Game Erin Morris, Client Relations Specialist
- 2. Budget & Billing Five Areas of Focus New Members Outstanding Balances Reporting Budget Review 01 02 03 04 05
- 3. 01 Beginning of Semester August or January
- 4. Budget The keys to understanding your organization’s budgeting procedure Cash Trends Does seasonality make sense? Recruitment, etc. 01 Analyze Budget Analyze last and current fiscal years Anything weird or out of place? Large amounts for odd budget categories? 02
- 5. How? How much is billed? Has everyone been billed correct amounts? How? Who? What? Who? Has everybody been billed? Are members missing? How? Appropriate items billed for? Housing? Chapter dues? National fees? Has the Chapter been Billed?
- 6. 02 Middle of the Road September/October or February/March
- 7. New Members Depending on when recruitment may be for different chapters, considering how to handle/account for new members is key Billing How and where members make payments? Who? How much? What? 02 Updates Update chapter roster and database 01
- 8. 03 End of Semester November or April
- 9. Are there any? Yes How much? Are they graduating seniors? Identify members that are outstanding and collect OR Build payment plans into the next year, if necessary Identify members and build plan to collect based on your organizations’ standards and policies Outstanding Balances Yes No
- 10. Reporting Red Flags Are Your Member Reimbursements High? Are there receipts for all reimbursements? Are reimbursements made out for even amounts? Are they being written to the same members over and over again? Are the amounts of the reimbursement checks correct?
- 11. Reporting Red Flags Vendor Checks Are the vendors valid? Are there receipts for all purchases? Are the amounts of the checks correct? Are checks made out for even amounts?
- 12. Reporting Red Flags Member Credits (if applicable) Does the chapter credit member bills? If so, is the credit valid?
- 13. Review Budget Review reporting to ensure that it is being done properly Records Ensure the Budget is Being Recorded Properly Any weird budget categories being used? 01 Budget Examine the Amount Budgeted vs. the Actual Amount Spent Is the chapter over anywhere? If so, why? 02
- 14. 248.273.0074 | www.billhighway.co Questions?
Notas do Editor
- Hello and good morning! My name is Erin Morris and I am a Client Relations Specialist at Billhighway. Billhighway is located in Michigan in Metro Detroit area and we are the financial software provider for many of the sorority and fraternity chapters across the United States. I am also a Delta Zeta and I spent 3 and half wonderful years as an active member of the Theta chapter at Ohio State. During my time as a collegiate, I held many positions within my chapter and was very active within the Greek community. I was not Treasurer of my chapter, but I always just assumed that their role was to tell everyone what they owed, collect everyone’s payments, and then if payment was not made, the treasurer would then stalk the member until they did. It wasn’t until I started working at Billhighway and began working more closely with officers, advisors, and Headquarters staff that I began to realize that the job of treasurer is much more than just billing and collecting. In fact, I now believe serving as a chapter treasurer is one of the most important positions of the chapter’s Executive Board. Lots of work goes into ensuring that the chapter stays afloat financially and I know I definitely didn’t have the know how to manage this at 18, 19, or 20 years old. Knowing how tough the job can be, we are here to help equip you with knowledge to help your chapter officers focus on the right financial topics, and allow you to proactively get ahead of any potential issues they may be facing.
- Today, we are going to go through the different areas you should focus on when reviewing a chapter’s financials. These areas include: how to budget and billing, what to do when new members come aboard, the importance of collecting outstanding balances, the different types of reporting you should be looking through, and what to look for when reviewing a chapter’s budget. Now - I’ll admit, when I first started working at Billhighway, I was very overwhelmed. I do not have a degree in Finance and I started as a Client Care Associate. It was my job to provide support to officers and advisors over the phone & email. I have already mentioned that I thought the sole purpose of the treasurer was billing members and chasing them down for payment. However, I would receive questions from treasurers on what they should be budgeting for, how they should record checks to pay vendors, and how to handle reimbursing members for purchases. Knowing that finances are just one of many topics you may be covering with a chapter during your visit, each topic today is aligned in the order in which they would occur during a semester. The goal is to give you ideas on areas you can focus on for that chapter, depending on when you make your trip. With that being said, let’s jump into it starting with the beginning of the semester…
- Budget and Billing Members At the beginning of the semester, it’s important to analyze a chapter’s budget and assist with invoicing the members. First, we are going to talk about budgeting…
- It is important to understand your organization’s budgeting procedure. All organizations are different when it comes to budgeting. Some may have a formal budgeting process for the full year, while others create budgets by semester or quarter. Either way, the key is ensuring the chapter has taken the time to establish a budget and they have a process in place to review it. When reviewing a chapter’s budget, where do you begin? First, is the current budget you are reviewing up to date? For chapters using a financial service provider, this maybe automatic, but if one of your chapters does this on their own, the first step is making sure you have up-to-date and accurate information to review. It is also important to understand the chapter’s cash trends. Do they default all members to a payment plan, and so expect to get funds later in the year? Is the chapter spending more money in the Fall rather than the winter? Why? Was it recruitment season? These are all questions you should be asking yourself while analyzing the budget. A chapter wants to be as accurate as possible when creating their budgets so analyzing the last fiscal year’s budget is important when creating budgets for the new fiscal year. If the chapter overspent somewhere, it might make sense to allocate more to that budget item the next fiscal year. Are there any fees owed to National Headquarters and does the chapter have a plan to be able to pay them? The budget should act as a guide to the chapter’s spending. As the school year starts, do they have a process to review the budget periodically with other officers? BEST PRACTICE- this should be done at least every other chapter meeting (if not each one, and more frequently during high spend periods like recruitment). Red Flag- chapters trying to operate without a budget. It may seem obvious, but we see it occur more frequently than you would anticipate!
- Let’s talk about billing. It is very important for the chapter’s billing to be correct. Treasurers should sit down at the beginning of every semester and figure out how much members should be billed. The chapter’s cash flow should be taken into consideration when creating billing for members to ensure that the chapter is going to hit those important due dates as well as have enough funds to still be able to do fun things as a chapter. You don’t want to have every single member on an installment plan because if that’s the case, the chapter may not have enough funds to cover all their expenses at a given time because they have only collected a portion. For example, if National Dues need to be paid to HQ in October, members should have been billed for that fee in Aug or September. Knowing how members will be paying is key. (Interact with audience) – Who in the room works with chapters that use a financial system that facilitates sending of bills and tracks member payments as they are made? Financial systems should provide reporting showing the bills that have been set up. If the chapter does not use a financial management system, you should be asking to view where they track what members have been billed. You should be looking at: How much has been billed? Has everyone been billed for the correct amounts? If not, why? Who has been billed? Has everyone in the chapter been billed? Is there anyone missing? Have the appropriate items been billed for? Are they missing anything that they should be billing for? If the Treasurer is only billing a select group of members or if some members are billed more than others could be red flags that something fishy is going on. It’s important to understand why members have been billed what they have been billed so that you’re able to get in front of any potential financial risks.
- New Members
- Depending on when recruitment may be for different chapters, considering how to handle/account for new members is key. Many organizations have guidelines or required processes for when new members need to be added to the chapter’s roster at HQ , and then when they should be invoiced for new member fees. Good questions to ask: Have new members been added to your database or member tracking system? Also, a good time to look over the entire member roster for the chapter to ensure no one is missing. Many HQ charge their fees based on active members so it is important that chapters keep rosters current. If your database doesn’t integrate with your financial system, do these members have accounts in your financial system? This not only allows you to send them a bill for new member fees, but it also may give them their information they need to submit payment. BEST PRACTICE: see if your organization or even financial system has a FAQ that helps new members know how to submit their payment. This is especially helpful for parents. The sooner they know how to pay, the sooner they can cross that off the list! Can you confirm all new members have been invoiced- if 50 new members, does the report show 50 people were invoiced? Were they billed the correct amount? Many systems will allow you to quickly glance at a billing report that shows total billed and the dollar amount. Within seconds you can show the treasurer how to confirm it was done correctly.
- The importance of collecting outstanding balances and reporting red flags
- How do they get real-time information? Many financial systems have reports showing real-time member payments, but chapter officers should be reviewing these on some type of a recurring basis. BEST PRACTICE: every other week (at least) before chapter meeting they review the report to see if there are women they should connect with after that chapter meeting. Talk to the importance of focusing on graduating seniors or sisters studying abroad earlier in spring semester- don’t wait until May to start those conversations! Communicate/Communicate/Communicate- if members understand early what they owe, and any penalties or activities they cannot participate in if delinquent, you hold a better chance of getting payment. Know what your HQ expects for members with larger delinquency balances- many HQ have procedures document on next steps that should occur for members with outstanding balances. Reach out to your HQ to see if they offer collections services, or provide any communication guidelines.
- Outside of who is past due, it is important to look for any reporting red flags. These red flags could alert you to mismanagement of funds, overspending or even potential fraud/embezzlement. We know the topic of embezzlement/fraud prevention is a huge focus for many organizations, so here are some red flags we advise monitoring to ensure suspicious behavior isn’t occurring at any of your chapters. Each organization handles member reimbursements different- some prefer to not have chapter members front funds for the organization, for others, it’s a core way in which they operate. In my experience working with many different organizations, I would always recommend that member’s are only making purchases on behalf of the chapter when absolutely necessary. When possible, have vendors send an invoice to write a check, or if available for your chapters, use a prepaid card for incidental spending (like recruitment or online purchases). When not possible, it is vital the chapter obtain a receipt for the purchase. With checks & prepaid cards this information is automatically captured, but having proof of a purchase will eliminate questions on misspending of funds later. We’ve all heard stories of the chapter officer who got a bag of chips & a pop at the store while picking up recruitment supplies, or included a magazine & gum in their purchase. Ask chapters if they have a policy for collecting receipts when issuing reimbursements. A huge red flag are reimbursements in even amounts. As you can imagine, it is rare for a purchase to be exactly $200, so seeing reimbursement amounts like this should prompt questions. That is where copies of the receipts are handy! Most financial systems will provide you with reporting where you can quickly filter to see the reimbursement amount. If you have chapters that manage their finances on their own, it’s even more important they have documentation for any reimbursements before issued. Reimbursing the same members over and over again should indicate that the chapter needs a better policy to handle paying for expenses directly, or a red flag for suspicious activity.
- Another idea- are there any approved vendors a chapter should be using? Some have tshirt vendors they aren’t allowed to use, etc. Not sure worth mentioning Talk through how to find this information- if using a financial system, should be able to export spending reports, filter by vendor to do a quick review. RED FLAG- seeing member/advisor names as vendors. We don’t recommend having Advisors make large purchases on behalf of the chapters either, unless absolutely necessary and always recommend chapter officers get receipts whether a member or advisor for historical documentation. Tell story of an advisor of one of our clients who was excited when the chapter started using a prepaid card because she no longer had to use her credit card for recruitment incidentals- she hated seeing her name on those reports and worrying that HQ would think there was something fishy with the chapter paying her money (and they were a chapter that did a great job of keeping receipts, etc).
- Be sure you know what scenarios are approved by HQ for the chapters to issue credits- do they offer discounts on dues for good grades, or paying by certain dates? Or are there discounts given for holding different officer roles? It’s good to do a quick review of the number of member discounts/credits that have been issues and see which members they are for. Also, make sure there are controls in place to prevent officers from creating credits on their own account. Most financial systems have these types of controls automatically, but for those managing on their own or through outside accounting services, it is important to have the proper approvals to prevent fraud.
- Reference back to earlier budget notes- some may apply here as well. At the end of each semester, chapters should be following HQ guidelines for managing budget surplus. Many groups have fall surplus roll over into the Spring and can be used as a cushion for incidentals that come up later in the year. At the end of the school year, most organizations have a stated process for how the chapter should handle any surplus of funds- ex. Transfer to house corporation, transfer to foundation, keep a portion chapter savings, etc. They should quickly review reporting to ensure that this is being done properly.
- (smile, you’re done.)