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Financial Issues

THE FUN BIT!

David & Lorelei Broadbent

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The Association Support Agency Association Management Event Management Secretariat Services

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The Association Support Agency Established 5 Years Started as home based business

with 1 client Now manages 13 associations with

city-based office

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Treasurer is

the Best Job

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Statutory Requirements GST Bookkeeping Reporting Banking

Statutory Requirements

Department of Tourism, Racing

and Fair Trading

Office of Fair Trading Website:

www.fairtrading.qld.gov.au

Associations Incorporation Act 1981

The Act requires that an Association is controlled by a Management Committee.

The Management Committee must be elected by Members at an Annual Meeting.

The Management Committee must have a person holding the office of President and another holding the office of Treasurer.

Associations Incorporation Act 1981

The Management Committee must prepare financial statements within 6 months of the end of the Association’s financial year.

Associations Incorporation Act 1981

The Management Committee must have the financial affairs of the Association audited by a registered and qualified auditor.

Associations Incorporation Act 1981

Audited Statements must be presented to an Annual General Meeting for adoption.

The Association must hold its AGM within 6 months of the end of its financial year.

Office of Fair Trading

The Association must keep a set of books to record the financial transactions of the Association.

Associations Incorporation Act 1981

The members of the management committee must ensure the incorporated association takes out insurance in respect of damage to property, death or bodily injury occurring upon the property of the incorporated association for a cover of at least $1,100,000 and shall keep such insurance cover current at all times.

Annual Returns

Must be completed annually within stipulated periods after AGM

Penalties for late lodgment apply

Statutory Requirements

Association Rules Must comply with the Act

Statutory Requirements

Questions and Discussion

GST

www.ato.gov.au

GST

Who should register for GST? You must register for GST if you are an

entity carrying on an enterprise; and your annual turnover is equal to or greater than the turnover threshold of $50 000 ($100 000 for non-profit organisations)

GST

Registering for GST To be part of the GST system, you

must be registered for GST. Your GST registration number is usually your ABN. If you aren’t registered for GST you can’t include GST in the price of sales that you make and you can’t claim input tax credits.

GST

How does the GST system work? GST-registered businesses must

include GST in the price of goods and services they supply or sell. If you're registered for GST, you can claim back the GST included in the price of your purchases as input tax credits.

GST – TAX INVOICES

Tax Invoices

To claim an input tax credit you must be registered for GST and you must have a tax invoice.

GST – TAX INVOICES

If you make taxable sales (that is, you include GST on sales to your customers), your GST-registered customers and clients will need tax invoices from you.

GST – TAX INVOICES

Purchases of more than $55 (including GST) do not need a Tax Invoice supplied by law.

Recommended policy – PROVIDE A TAX INVOICE FOR ALL SALES AND GET A TAX INVOICE FOR ALL PURCHASES.

GST – TAX INVOICES

You will still need proof of your purchases if they cost $55 or less (including GST) but the proof may be things like cash register dockets, receipts or invoices, which are not tax invoices.

GST – TAX INVOICES

If your customer, client or member asks you to provide a tax invoice, you must do so within 28 days.

GST _ TAX INVOICES

Tax invoices for taxable sales totalling less than $1000 must include:

1. the Australian business number (ABN) of the supplier;

2. the GST-inclusive price of the taxable sale;

3. the words 'tax invoice' stated prominently;

4. the date of issue of the tax invoice;

5. the name of the supplier;

6. a brief description of each item supplied; and

7. the GST amount. This can be shown separately or, where the GST payable is exactly 1/11th of the total price, as a statement along the lines of ‘the total price includes GST’.

GST - Reporting

Business Activity Statement

(BAS) Can be lodged Monthly or

Quarterly

GST

Questions and Discussion

Bookkeeping

Golden Rule:

Keep it SIMPLE

Bookkeeping

Invest in a decent

accounting software package

$400 - $600

Bookkeeping

Accounting Methods

Cash Accounting Accrual Accounting

WHICH IS BEST???????????

Bookkeeping

GST amounts collected or paid can be reported to the ATO either on a cash or accrual basis. The difference between methods is when the liability is recorded and when to report tax collected and paid. 

Bookkeeping

CASH METHODIf you choose to report your GST on a cash basis – you will not pay any GST to the Tax Office until you have collected it from your

customers.  You will also not be able to claim back any GST you have been

charged by your suppliers until you actually pay your suppliers.

Bookkeeping

ACCRUAL METHODUnder the accrual basis (non cash basis) you

will recognise GST when you receive an invoice (that is, when you have a legal

obligation to pay your suppliers) and when you supply goods or services (that is when you

have a legal right to claim payment).

Bookkeeping

Questions and Discussion

Reporting

Prepare financial statements for your Management Committee for each meeting.

Ensure the financial statements are minuted as being noted or accepted.

Banking

HANDY HINTS: Bank at least weekly Use a spreadsheet to record cheques

as a deposit summary Use the quick deposit system Look into credit card facilities

Banking

Cheque Signatories

Biggest hassle with new

Management Committees

CHANGING THE CHEQUE SIGNATORIES

Cheque Signatories

Recommended System

Have four cheque signatories: President Secretary Treasurer Immediate Past President

Cheque Signatories

Get all four signatories to meet at a bank at the same time and get the cheque signatories done

there and then.

Reporting & Banking

Questions and Discussion

Managing Membership

Annual membership subscriptions Managing unfinancial members Make the decision to remove

unfinancial members from your system

Managing Membership

Questions and Discussion

Insurance

The members of the management committee must ensure the incorporated association takes out insurance in respect of damage to property, death or bodily injury occurring upon the property of the incorporated association for a cover of at least $1,100, 000 and shall keep such insurance cover current at all times.

Insurance

Association Liability Insurance Public Liability Insurance Standard PL Policy is $5 Million Directors & Officers Insurance

Insurance

Where to get it ?????

Insurance

Questions and Discussion

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THAT’S ABOUT IT

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