Hello - I am the treasurer of an amateur football club and I'm in the process of completing our 31 May 2013 accounts, ready to present to the local FA. The chairman of our club has requested payment of £113.33 for various expenses incurred during the season such as Water, First Aid Supplies etc. The problem I have, is that despite telling him at the start of the season that I wanted to do things properly and have records / receipts for eveything, he has presented a basic list of costs with maybe 50% of the expenses backed up with receipts.
I see that I have three options...
1 - Do I just pay him and keep his hand-written note as a record?
2 - Should I type out an invoice / receipt and get him to sign it to cover my (the clubs) back?
3 - Do I have to have a difficult conversation and tell him I can't pay without receipts??
Your thoughts and comments would be greatly appreciated.
its a scenario that we all see many times and clients do not appreciate the precarious position that it puts us in.
I don't have any dealings with clubs and charities but the principle is basically the same as with commercial organisations.
I have found that the most effective approach is asking clients
"If you were sitting opposit an inspector from HMRC how would you explain the withdrawal of x amount from the business?"
Their reasoning is normally convincing but then you hit them with the follow up.
"And how would you prove that what you say has been paid for what you suggest?".
Generally they come around to the fact that if they cannot prove something then it never happened so the withdrawl of funds could only have been for them personally and they can either repay it or it ends up in the directors loan account (which of course you do not have as an option).
Once the client understands that for things going forwards put through the 50% of the expenses for which the client has receipts.
For the remaining £56 (ish) I assume that we are talking here about a very immaterial amount.
The chairman is not going to want to be giving his time free and repaying £56 to the club.
So, create a one off receipt for the goods from the chairman similar to if you had purchased the goods through ebay. Write out an invoice from the chairman to the club for the money (similar to the way that one would create a Management representation letter).
Emphasise that this is a situation that will not be repeated.
Paying the invoice clears the club and puts the emphasis for any liability (not that there will be one for this amount) onto the chairman.
I should emphasise that the amount here is not matwerial to any party involved, it's a one off and your primary concern is keeping the club in the clear.
For more material amounts HMRC may regard such as disguised payments to the chairman but the likelihood of making an issue of one immaterial payment in isolation is remote.
In short, even for this small amount you will actually be employing all three options that you give, not just one of them.
You do definitely need to have the talk with the chairman and make them appreciate that sorting this out must be considered a one off excercise which you are only able to do because of the immaterial nature of the expense (I don't even give mine that option as expenses without receipts are straight to the DLA).
welcome to the forum.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thanks for your comments Shaun, I will definitely follow your advice and make sure he follows the rules. I am also in the process of re-writing the clubs constitution so I think I'll be writing a rule in covering this subject and will try use a quote from your reply along the lines of "If you cannot prove something, then it never happened" - simple but very straightforward.
Thanks again for a prompt and considered answer - I can see this is going to be a very useful forum for me when I start training how to be a proper bookkeeper!
I am the treasurer for the team i play for on a Saturday, and i am on the finance committee for Scarbrough Football club. You will always have this problem with football clubs. By their nature they deal in alot of cash, and (without sterotyping too much) tend to attact people who think finance is a neccessary evil as opposed to a valuable part of the club.
Good luck for next year but i have tried to impose systems for years at my saturday but always find that we have an excess of cash each year (at least it is better than a deficit) that no one has a clue where it came from. We have never had the North Riding FA look at our books, and to be honest i dont think i could account for every penny, but compared to 9 out 10 clubs in the league i think we are by far the more reliable. From what i have seen just having £113.33 without a recipt is pretty good going.
Remember these are not for profit entities so you are not fiddling the tax man out of any cash, your leageu fees are the same as ever other team if you make lots of money so i think the FA would only intervene if it felt you were doing something morally wrong as opposed to doing your best (for free) in a difficult situation to keep the club going.
Scarborough Fc are a lot better than my saturday side but they learnt the hard way about finacial mismanagment. They lost their stadium, went bust, and find them selves in the Evo Stick North( after at one point being in the play offs for what is now league 2, and playing Chelsea in the FA CUp) playing 20 miles away in Bridlington. So dont let your Chairman think that finance isnt important.
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Nick
Nick Craggs FMAAT ACA AAT Distance Learning Manager
