How much money is in the bank? How much is still to be processed? How much are you owed or is owing? Money sponsorship, subscription, donations, the list goes on... No matter what size the station is, being across the finances is crucial for any community broadcaster.

Money attaches itself to almost everything these days and has certain implications well outside the money sphere. For example:

• Insurance, which brings in implications of risk.
  
• Copyright - compliance.
  
• Wages – HR, personalities and issues.
  
• And so on…

As a result, up to date knowledge is extremely important, as is getting the right person for the job; someone with the skills versus someone who puts up their hand.

Not-for-profit

A non-profit organisation is one which is not operating for the profit or gain of its individual members, whether these gains would have been direct or indirect. This applies both while the organisation is operating and when it winds up.

Any profit made by the organisation goes back into the operation of the organisation to carry out its purposes and is not distributed to any of its members.

Organisations will be non-profit where their constituent or governing documents prevent them from distributing profits or assets for the benefit of particular persons, both while they are operating and on winding up. These documents should contain acceptable clauses to indicate non-profit character. The organisation's actions must be consistent with this requirement.

A non-profit organisation can still make a profit, but this profit must be used to carry out its purposes and must not be distributed to owners, members or other private people.

Registered for GST?

The GST registration threshold for a non-profit organisation is $150,000. This means your non-profit organisation is not required to be registered for GST unless the GST turnover of your organisation is $150,000 or more.

You may still choose to register your organisation for GST if its GST turnover is less than $150,000. The decision to voluntarily register for GST is one that ought to be based on the administrative needs of your organisation. Some organisations may choose not to register for GST because they consider the GST reporting requirements to be a greater burden than the benefit they would receive, for example, access to GST credits.

Tax Concession Charity?

Charitable institutions must be endorsed by the Tax Office to access the following tax concessions:

• income tax exemption
  
• goods and services tax (GST) charity concessions, and
  
• fringe benefits tax (FBT) rebate.

Deductible Gift Recipient?

If a charitable institution wants to receive tax deductible gifts, it must be endorsed as a deductible gift recipient (DGR). Only some charitable institutions will be entitled to DGR endorsement.

Fundraising

Fundraising activities such as bingo, raffles and door knock appeals are regulated by state and territory authorities.

Each state has its own laws for these activities and they have provided an overview of their requirements.

If your non-profit organisation is registered (or required to be registered) for GST, the money raised from fundraising activities will be subject to GST unless the funds are a genuine gift to your organisation. If you are a charity, gift deductible entity or government school, the money raised from fundraising events will not be subject to GST if your organisation:

• raises the funds by selling donated second hand goods
  
• raises the funds by holding a raffle or bingo, or
  
• is able to treat any sales connected with the fundraising event as input taxed. In this case, the funds raised will not be subject to GST, but your organisation will not be able to claim credits for the GST in any purchases connected with the event.

Profit and Loss statement

Total revenue less total expenses for a period of time calculated in accordance with generally accepted accounting principles.

Balance Sheet

An important business document that shows what a business owns and owes as of the date shown. Essentially a "balance sheet" is a list of business assets and their cost on one side and a list of liabilities and owners' equity (investment in the business) on the other side with the amount for each. The liabilities include all that the business owes.

Cash versus Accrual

It's important to understand the basics of the two principal methods of keeping track of a business's income and expenses: cash method and accrual method (sometimes called cash basis and accrual basis). In a nutshell, these methods differ only in the timing of when transactions, including sales and purchases, are credited or debited to your accounts. The accrual method is the more commonly used method of accounting.

Under the accrual method, transactions are counted when the order is made, the item is delivered, or the services occur, regardless of when the money for them (receivables) is actually received or paid. In other words, income is counted when the sale occurs, and expenses are counted when you receive the goods or services. You don't have to wait until you see the money, or actually pay money out of your checking account, to record a transaction.

Under the cash method, income is not counted until cash (or a check) is actually received, and expenses are not counted until they are actually paid.

Debtors

Businesses that owe you money.

Creditors

Businesses that you owe money to.

Cash receipts book

A cash receipts book is a list of all the income you have received for your station. You may decide to have more income columns in your cash receipts book so that you can separate your income into the categories that apply to your business. Using further columns such as these may be helpful to obtain information for your business. For example: subscriptions, sponsorship and merchandise.

A cash receipts book will also help you reconcile your bankings with your takings.

Petty Cash

A small amount of cash kept on hand by a business for incidental expenses. The trick is to limit who uses it and how often it is reconciled.

Authority for payments

It is useful to have in place a procedure of authorizing payments, usually by the General Manager or Financial controller. How much, to who, for what, date, etc… Once the cheque has gone, it is gone.

Reports

Whether it is a P&L, debtors or creditors, it doesn’t mean much if it is out of date or out of control. So keep it up to date and then you can manage things like your debtors and creditors.