Ensuring that your charity has solid financial foundations is instrumental to continuing with your efforts.
A key part of this is ensuring that your charity is sustainable, which includes maintaining a healthy cash flow and keeping funds reserved for emergency expenditures.
So, how can you do this?
Keep clear financial records
When it comes to finances, it is vital to document everything, from money from fundraising to utility bills. You should have a system in place to keep track of your income and outgoings, which is easily accessible.
For this, it may be worth considering using cloud accounting software, which can automatically update your charity’s finances whilst being securely stored online.
Also, if you choose to collaborate with an accountant, using cloud accounting software simplifies this process by allowing individuals to access the relevant documents remotely, as it is internet-based.
Set a budget
If you opt for cloud accounting software, you can also make use of the available forecasting options which can give an idea of your charity’s finances going forward.
From this, decisions on how to allocate your finances can be informed, as well as whether you may need to obtain more funding.
For instance, for a mental health charity, before deciding to take on another counsellor to support your efforts, you will need to plan for the cost of their salary, along with any additional equipment needed (such as computers and office space).
Evaluating your current finances in relation to your expected future position can then give an estimate of how much you can allocate to this, which will help with the hiring process.
Whilst it can be tempting to pour all the charity’s money into projects that contribute to the cause, as mentioned, you must keep money reserved to ensure the charity is sustainable.
Need advice? Contact our charity experts today.