The Frugal Canadian

A frugal spender seeks to find new ways to save money and increase her net worth.

Sunday, January 29, 2006

Keep on Track of your Finances

I recently accepted a volunteer position in the capacity of Treasurer for a local non-profit organization. One of my first tasks was to work with the new General Manager to develop the organization's 2006 budget.

Since I'm new to the organization, I first wanted to look at the 2005 results to see what went well for the club and what needs improvement. As it turned out, the bookkeeping had not been done for the past 6 months and so results weren't available. After waiting for a few weeks I finally got the financial results this week. It turns out the club lost almost $25,000 this year when they were scheduled to break even. While the OLD general manager did a good job of growing the club and increasing revenue, he also spent a tonne of money on various expenses.

I should be clear that there was no impropriety. All of his expenditures were authorized and approved by the board of directors. What went wrong is that the board looked at all of the small expenses in isolation and had no idea what these amounts were totalling throughout the year. Their lack of review throughout the year, meant a big surprise at the end of year.

I have now implemented a monthly reporting process which should take the admin staff no more than 30 minutes to prepare each month. I've also outlined a report which is slightly more comprehensive to make sure there are no surprises under my watch. Let this be a lesson to us all. Look at where you're spending your money throughout the year. If you don't at the end of the year, you're likely to be well short of your savings target.


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