A guide to third sector trading - WCVA

More documents

Recommendations

Info

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. 138
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 • Suspicion of something worse: A much less common reason for producing inadequate financial reports is dishonesty. Since any accusation of dishonesty is severely damaging to an organisation, the board has an obligation to remove any grounds for suspicion by insisting that full reports are presented to them every month and are open to scrutiny. (If the accounts don’t seem right or requests for information are ignored, the board must investigate, no matter how unpopular this may be. Treat the situation sensitively and in confidence. But be decisive and insistent.) Poor quality reporting: Poor reporting is as bad as no reporting, and the board should take steps to put things right as soon as possible. Here are some common errors by groups who know they should be monitoring, and still can’t get it right: • no financial report has been produced: this may suggest a systems failure, especially if this is because • the wrong information – the board must examine a monthly balance sheet (see section 6.4), but voluntary organisations are often so familiar with looking at budgets and expenditure accounts that there is a good chance that this is what is presented instead • irrelevant information – when boards are told the cost of toilet rolls rather than the costs of providing a commercial service or employing people, then that’s what members will talk about • too much information – it is extremely common for an eager (or manipulative) manager to provide so much that the directors cannot sift out what it relevant and important • accountantese – reports should be presented in language which fits the understanding of the directors – formal ‘accountantese’ is unnecessary, and it turns people off. − there are problems finding a reliable treasurer – then you must do things a different way − the manager or treasurer were too busy – operate procedures better or revise work priorities − board members were too polite to ask for it – insist on it 139
Page 1 and 2:
It’s an idea, but is it business?
Page 3 and 4:
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90: It’s an idea, but is it business?
Page 139: It’s an idea, but is it business?
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Page 203 and 204:
Page 205 and 206:
Page 207 and 208:
Page 209 and 210:
Page 211 and 212:
Page 213 and 214:
Page 215 and 216:
Page 217 and 218:
Page 219 and 220:
Page 221 and 222:
Page 223 and 224:
Page 225 and 226:
Page 227 and 228:
Page 229 and 230:
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
Page 237 and 238:
Page 239 and 240:
Page 241 and 242:
Page 243 and 244:
Page 245 and 246:
Page 247 and 248:
Page 249 and 250:
Page 251 and 252:
Page 253 and 254:
Page 255 and 256:
Page 257 and 258:
Page 259 and 260:
Page 261:
show all

A guide to third sector trading - WCVA

Create successful ePaper yourself

Delete template?

Save as template?