Managing Chapter Funds
All Chapter funds should be deposited in a local bank account in the name of the Chapter. Even though the account may be small, it is important that it be kept completely separate from any personal or business account of the Treasurer.
Typically, a Chapter names two officers with check signing authority, with both signatures being required on all checks by the Chapter.
It is a good practice to deposit all money received daily. To take care of small cash expenditures, a petty cash fund may be kept on hand and replenished occasionally from the treasury.
If the Chapter is incorporated, a corporate resolution must be passed to change the signatures. Board action is required to accomplish this regardless of corporate status. Your bank will advise you on the appropriate form of resolution.
Any checks received should be endorsed and a bank deposit slip prepared, listing in detail the checks received and showing the total amount of checks and cash to be deposited. All funds should be deposited the same day as received, if possible.
Once the monies are deposited into the bank account, they are entered in the accounting system. Enter the date the checks were deposited and also the distribution (allocation) to the proper income account.
Credits received directly into the bank account should be recorded into the accounting system as well.
For invoices which are paid by check, the invoice number, date, amount and terms are entered into an accounting software system, with the amount charged to the correct account (usually an expense account) and a brief description entered. Depending on your procedures, checks are cut at least once a week.
Wire transfers and automatic debits to the bank account are entered via a journal entry into the accounting system.
Reconciling bank statements with Chapter financial records is done in order to make certain that the cash balance in the accounting system is in agreement with your account at the bank. It is suggested that the bank reconciliation be prepared as soon as possible after receipt of the bank statement.
The first step is to compare the checks recorded in the cash detail ledger to the checks that cleared the bank during the month per the bank statement. Then compare any checks listed as outstanding in the prior month’s bank reconciliation to the checks that cleared the bank during the month per the bank statements. Any checks that did not clear the bank are listed as outstanding on the reconciliation.
The next step is to compare cash receipts recorded in the cash detail ledger to the deposits/debits on the bank statements. Any deposit made close to month end that has not shown up on the bank statement is listed as outstanding on the reconciliation. Any deposits shown as outstanding on the prior month’s reconciliation should appear as a deposit on the bank statement. If not, the deposit should be investigated. Any other various charges or credits shown on the bank statements, but not recorded in your cash account or vice versa, must also be taken into consideration.
It is a good plan to keep a file, either manual or electronic, of each month’s bank reconciliation. In addition, keep all bank statements together arranged by month for future reference.
