A guide to third sector trading - WCVA

It’s an idea, but is it business? A guide to third sector trading
1: Getting
started
2: First steps 3: Business
planning
4: Legal and
governance
5: Funding
and
resourcing
6: Financial
controls
7: Managing
growth
8: Management
and
governance
9: Social
enterprise
10: Sources
of support
• ‘We are too busy’ – resolved by readjusting priorities; few other
issues are more important.
• ‘We don’t want to’. We are prepared to work on almost
anything but not accounts. Assuming persuasion won’t
work, the only answer is to find other people who will take
responsibility.
• ‘We don’t understand’ – sometimes resolved by training.
• ‘We really don’t understand and never will’. Here’s a real,
serious and probably universal problem. Perhaps only half the
members of an average board are emotionally and intellectually
attuned to responding to columns of figures. Examining the
accounts is like lifting the bonnet of a car – while some drivers
are perfectly happy to get their hands dirty, many others will
immediately surrender their physical and financial security to
‘experts’. So:
− ask people to be honest about their level of understanding
− find out what type of training, if any, which might help them,
but don’t assume this is an easy matter to put right
− if training does not help, give the financial monitoring role to
a small finance committee composed of people who do not
suffer the same affliction
− make it clear that directors still have a responsibility for good
financial governance – a problem with interpreting financial
information does not, of course, prevent them from taking
advice and making sound business judgements once the
accounts are explained.
• ‘… and the reason why there is no finance report again this
month…’: This could be a cry for help, or a sign that someone has
something to hide. You need to take firm and swift action first
to explore what the problem is and second to establish regular
excuseless financial reporting as fast as possible.
Danger signs when there is no finance report: Understanding
why there is a problem is important.
• Poor skills: Is it possible that the person responsible doesn’t
actually have the skills you need and they are covering up?
Check their abilities and provide support if necessary. They may
be too embarrassed to admit the weakness so it can also be a
matter of confidence. But if you fail to deal with the problem
there is a serious risk that the business will suffer.
• Misguided priorities: Is it possible that the person responsible is
not giving the work the priority it needs? Check whether this is a
matter of time management or understanding. The board or line
manager should give clear guidance on what is required.
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