With Junee facing the closure of its’ last physical bank branch in early 2023, AND the fact that the major banks have just commenced advising customers that cheques (and passbooks) will be phased out within the next couple of years, it is a prudent time to take a look at your not-for-profit community organisation or sporting club’s current banking practices and the institution(s) your group utilises.
With the majority of day-to-day banking transactions having moved to E-Banking and EFTPOS, the traditional banking methods of using counter-signed cheques to make payments and only accepting cash for payments are fast going the way of the Dodo!
Primary Account with Electronic Banking Access
Your organisation should already have a primary bank account for accept deposits and to make payments, which may also be known as a Trading Account, Transaction Account or Operational Account. This account most probably currently has a cheque book attached to it and more than likely already has Electronic Banking options via a website and/or via an App for a Phone or Tablet.
But many organisations are going to have to look at new processes for handing transactions from their account. With Cheque Books to be totally phased out, the best solution is probably to move to “Pay Anyone” transfers, direct from your primary account.
Just like a Cheque, you’ll normally need at two Authorised Persons to approve any transfers/Pay Anyone transactions. Normally your Treasurer will initiate a payment and then they inform one of the other Authorised Persons, normally the Secretary and/or President, to approve the payment(s)… and with most banks they’ll have approx 24-72 hours to approve the payment.
NOTE: If you are currently using an Association Account with the Commonwealth Bank, you may wish to look at alternative providers! CommBank have the most restrictive electronic banking authentication system out of any bank in Australia (if not the world!) — they require BOTH authorised persons be physically present in the same room, with their individual code generating dongles, when authorising payments or transfers… and this bought many volunteer based NFP organisations to a grinding halt in the middle of the pandemic — and even in normal times you all know how difficult it can be to get two volunteers together!!! Virtually every other banking organisation in Australia allows one authorised person (usually the Treasurer) to initiate a payment or transfer and then inform another authorised person (often the President or Secretary) to go in to the banking app/website within 24-72 hours to approve the transaction.
Also, it is highly recommended that you consider installing the App for your particular bank on your Smart Phone and/or Tablet… they are often simpler to use AND they can be used just about anywhere — this can be especially useful if one or more of the Authorised Persons is away.
You’ll probably have noticed more and more suppliers are including Direct Deposit details on their invoices… and you should do the same with your own organisations invoices and membership forms to make it easier for your clients and members to quickly pay directly to your organisations bank account.
You may also wish to setup a PayID for your organisation — either using your organisations’ ABN or a generic email address… if you have your own domain (and we recommend every incorporated association does) then something like firstname.lastname@example.org could make sense. And be sure to LIST your PayID on all your invoices, membership forms etc!
Don’t fret that the last physical bank branch in Junee is closing its’ doors soon — there are alternatives, including using the local Post Office and the Bank@Post service.
Over 80 financial institutions, including CommBank, Westpac, NAB and Bendigo Bank (NOTE: ANZ does NOT support Bank@Post), allow you to
- deposit cash or cheques
- withdraw cash (including small notes and coins for floats
- and even check your account balance
at participating Post Offices, include more than 1,800 in rural and remote locations — and YES, that includes Junee!
Australia Post does NOT charge a fee for these services, but check with your individual bank to see if there are any fees they charge to your account.
Visit Neil at the Junee Licensed Post Office to discuss your organisation’s banking needs to see if Bank@Post is a suitable option for your organisational banking needs — you’ll be pleasantly surprised at how easy the service is to use!
Debit Card Account
With more and more purchases moving to online stores, or simply for ease of purchasing in person, it is becoming ever more essential for Not-for-Profit organisations to have access to “Credit Card” or more likely a Debit Card with VISA or Mastercard facilities.
Currently many organisations rely on one of their members, often the Treasurer or Secretary, to use their own personal card and then have them submit a Reimbursement claim, but —
- This is extremely UNFAIR on that individual
They may be out of of pocket for weeks or months until the Reimbursement claim is processed by your organisation
- It may posse problems with warranties and returns
If a claim needs to be made against the purchase, then the original cardholder may be the only person about to handle the contact with the supplier
- It goes against basic corporate governance policies
It becomes harder to track what payments are for and often the personal cardholder is also one of the Authorised Persons on you primary account and it does NOT look good with tons of payments from the organisation going to one of these people!
- The EXACT wording of the motion(s)
- Who moved the motion(s)
- Who seconded the motion(s)
- The final decision
The simplest solution is to open a single Debit Card account with your bank in the Organisations Name — Yes, you’ll most likely have to assign the card to an Individual within the Organisation (ie the President, Treasurer or Secretary) and then change the cardholder when they are no longer in that role… but you need to update the Authorised Persons on your primary account when they leave anyway, so this should occur at the same time.
I’ve heard many comments that “there is No Security nor Oversight” when having a Debit Card… this is WRONG…
Your SECURITY against misuse of organisational funds via the Debit Card is to only keep a small amount on the card for the majority of the time (ie approx $200 to $500 depending on your organisational needs) and treat that sum like Petty Cash — then IF/WHEN you need to make a larger purchase on the card you have TWO Authorised Persons approve a transfer for the EXACT AMOUNT of that single purchase from your Primary Account to the Debit Card. This also allows you to add references and comments to help track your organisations expenditure.
Square Merchant Account for accepting EFPTOS Payments
The Pandemic accelerated the transition from Cash only transactions to Card (or phone/watch) payments. It is now expected by customers that EFTPOS facilities _WILL_ be available for virtually any in person transaction.
So having access to at least one EFTPOS terminal (or more) for your event or meetings is almost mandatory these days… fortunately, and thanks to funding received by Riverina Schoolboys Rugby Carnival Inc, through the Investing in Rural Communities Futures fund by FRRR, there are now EIGHT Square Terminals kits available for hire by local not-for-profit community groups and sporting clubs based, or operating, within Junee Shire.
Community Groups and Sporting Clubs will be required to sign up for their own FREE Square Account. You only need to do this once, and we recommend you allow four weeks for the application to be processed (it is usually a lot quicker than this, but always allow for potential delays)
Use the following link to sign up for a FREE Square account AND receive free processing on up to $1,000 in sales during your first 180 days. Only merchants new to Square are eligible.
Once you login with your organisations email address and password, funds collected through the terminal would go direct to your own organisation’s bank account, less a 1.6% processing fee by Square.
These terminals are now managed by the Junee Community Centre… and we’ll have more information about these terminals and how to hire them available soon, but a small daily hire fee for the Terminal hire, WiFi access and Receipt Rolls, would also be charged.
In their simplest form, you just enter the dollar amount into the terminal and have the purchaser tap their card (or phone or watch). You can also program them to have your more commonly sold items or services pre-configured so you simply tap an icon and that amount will be added to sale… you can then get detailed reports on just how many sausages you sold compared to steak sandwiches… the reports will even break transactions down by time and more.
Your Square account will also allow you to process online payments eg for annual membership fees, purchasing of tickets etc.
They can even be used to record Cash Sales to assist with stocktaking etc.
If you have excess funds in your Primary Account and have no major expenditure coming up in the foreseeable future, you may want to consider investing the excess funds in to one OR MORE Investment Accounts — these can be “At Call Accounts” with a slightly higher interest rate compared to your Primary Account, or a Term Deposit where funds are held for a set period of time.
Only you’ll know how much money your organisation will need to have “readily on hand” for your regular operations or an upcoming major event… but if you have even as little $1,000 spare, it can be worth investing as a small income earner.
SHOP AROUND for the best interest rate vs term length!
You DO NOT have to use your primary bank for your Investment Account(s)!!! They _may_ have a good rate, but do a basic investigation into other options from different banks! You may decide to go with another bank OR you could potentially have a discussion with your primary bank and see if they can match the offer.
DO NOT stick all your Investment funds into a single long term (12-months or longer) account. Often short term (3- or 6-month) accounts can often bear higher interest and you can access the funds sooner, if required.
It may be appropriate to have multiple Investment Accounts that mature at different times through out the year, especially if you go for longer terms, so you can either move it quickly back to your Primary Account if required OR you can simply re-invest it again.
If you have special or major projects coming up (eg you are planning to build a new storage shed or undertake major upgrades to a building) and you have set aside (or allocated) a portion of your exisiting funds to this project, but aren’t yet to commence the project (because you need additional funds before you can afford to commence or have applied for a grant to contribute toward the project and are waiting for that), then seriously consider placing these funds in a dedicated account and label it as such in your Annual Financial Report (eg Investment Account for Hall Extension) — This can quickly and easily explain to Grant Accessors (and your Members) why you have an “excess of funds just sitting in an account” — basically you DON’T — you have pre-allocated to a major project.
Also consider what are the requirements to earn any bonus interest — I was once involved with an organisation that could have earned an extra few percent interest on their Investment Account _IF_ they deposited $100 each month and made no withdrawals… but for some reason that simple deposit wasn’t happening, so they lost a significant bonus interest over a couple of years — the solution ended up creating an automatic transfer of $100 on the first Monday of each Month… (And then if the Primary Account had more than say $10,000 in it at the end of the month, they’d transfer at least half of the “excess” into the extra bonus account to continue to build a reserve fund!)
Investment accounts are one area where you really should seek independent professional advice from a licenced financial advisor to ensure that the proposed solutions actually meet your organisations requirements!
Preparing Committee Minutes for Banking Purposes
When looking at establishing new bank accounts, changing authorised persons, or re-investing investment funds, be sure to fully minute the decisions regarding your banking accounts that were made at your Committee Meeting, including:
Then print a copy of these minutes off and have BOTH the President and Secretary (or other Authorised Person) SIGN and DATE the printed minutes as “a true and accurate record of the meeting”.
You’ll most likely be required to supply these signed minutes to the Bank when ever you open an account or make changes to exisiting accounts, to prove that the decision was approved by your full committee.
If you are changing the names and signatures of Authorised Persons with the bank, you’ll also need signed and dated copies of Annual General Meeting Minutes showing who the new Office Bearers are.
The AGM minutes are also a great place to record the resolutions to change the Authorised Persons.
Examples of resolved (passed) motions could be worded along the lines of…
Minutes of ABC Community Group Inc
Held on June 30, 2022 at Junee Community Hall
“RESOLVED on the motion of Fred Smith (Treasurer) and seconded by Mary Jones (President) that a new Investment Account be established with XYZ Bank.”
“RESOLVED on the motion of Fred Smith (Treasurer) and seconded by Colin Johnson (Vice President) that $25,000 be transferred from the Association’s Primary Account (BSB 123456 A/C 7890123) to establish this new account”
“RESOLVED on the motion of Fred Smith (Treasurer) and seconded by Tina Patterson (Secretary) that the initial term shall be for 9 months ”
Junee Community Network, nor our team, are NOT financial advisors. The above information is provided as some general thoughts for not-for-profit community groups and sporting clubs to potentially consider to see if they might suit your organisations’ particular needs.
We strongly recommend you seek independent advice from a licensed financial advisor to determine the exact needs for your individual organisations circumstances.