Because the role of PTO Treasurers is so very important, volunteers stepping up into the role have questions- a lot of them sometimes!
This post will answer four of some of the most common questions Treasurers and PTO volunteers have about managing PTO money, quick and dirty style, so let’s hop to it!
What if I don’t have a budget set? We are new and have never done this so how do I know what to set as a budget?
Creating a budget is a great way to know your group is on track to come out at least in the black for the year, so it is recommended that all groups use a budget.
Otherwise, how else will you know if you have enough money left in the bank to last for the year?
PTOs cannot run up a debt, so staying at a level with money literally in the bank is a must!
Truth is, setting a budget really is an art more than a science.
It’s going to vary each year based on a bunch of different factors, some unknown to you at the time of making the budget!
The key is to treat the budget like living, breathing document that you’ll use as a guide throughout the year, but also be ready to tweak if the need should arise.
Check out this article for more information about how to create a budget.
How do you account for the annual carryover ?
Ideally, your group should be rolling over or carrying over a chunk of money to help pay for the initial expenses for programs and events before your Fall fundraiser income comes in.
Remember that your PTO can never have debt and must keep bank balances in the positive area, at all times.
So carrying over a small amount is absolutely necessary unless you’re planning to not spend anything before the fundraiser is complete with proceeds in the bank.
Some groups specify how much should be rolled over in their Bylaws and Standing Rules and also spell out how the budget resets each year.
Other groups choose to also have the carryover amount reflected in their annual budget so that the budget shows the entirety of available PTO funds, with income and expenses balancing out to zero.
And other groups prefer to skip including the carryover income in their budget, instead choosing to have the carryover amount and initial bank balance for the fresh fiscal year only be reflected in the first Treasurer’s Report.
This means the budget will not net out to zero and instead will (hopefully!) show the carryover amount when the income and expenses are netted out.
None of these methods are wrong and it comes down to personal preference.
As long as the carryover pot of money information is reflected somewhere, you’re good to go!
How to handle fees from non-cash payments like Square?
Non cash or check/ (i.e. credit card) payment processors like Square charge a small fee to use.
And the fees aren’t reflected in the checking account because they are taken out before the automatic deposits are made, so the full amount paid isn’t reflected in the checking account, nor recorded on the register.
To accurately account for the fees, you have two options:
Record the net income as deposited into your bank account or record the gross income before the fees and then also record the expenses.
It’s far easier to record the net income and this is the way I’d recommend because there’s no way to change the fees.
They’re always going to be there, so it’s not something you can control. If members really care about how much is getting lost to transaction fees, you can always tell them the percentage so the amount can be calculated from the deposited amounts or by looking at your payment processor dashboard.
How to handle tracking the financials for specific events?
Let’s say your Family Events Chair is planning a Special Person’s Dance and they want to track all of the pieces and parts that go into the event, like refreshments, vendors like the DJ and decorations.
One option is to add additional budget expense categories (Dance: Food; Dance: Decorations, etc.) but you’ll have to split them in the transaction register, which may be a pain.
Depending on how many overall expenses you have, this might be the easiest, but what other programs you need and the level of detail you’re looking for is also a factor.
Another, better idea is to make a copy of the Treasurer’s Finance Manager just for the dance and have the event chair handle tracking all of the information for it.
This is probably the method I’d recommend since you as Treasurer don’t necessarily care about tracking the details of the dance expenses.
Only the person handling the actual planning of the event really needs to know this level of specificity.
It’s more something the committee chair could/should do since the group just needs to approve a top line item amount for all dance expenses and not each expense sub-category.
If the specific expenditures are broken out in the budget, then your group will have to vote on changes to any one of them instead of the event chair being able to self manage and split the pot as they sees fit.
The bottom line is that your job as Treasurer is big enough that it’s ok to push some of the financial tracking like this one back to the Committee Chairs and Officers making the request.
Over to you!
And that’s how we do things around here, getting right into the nitty gritty of how to best operate as a treasury officer and answering common questions about how to handle situations like creating an a annual PTO budget, accounting for the year to year roll over or carryover money, tracking credit card fees and event expenses.
Now that you have the answers so you can get on with your day, filled with all of this Treasurer knowledge!
Hope you feel empowered to be a better Treasurer, now knowing the answers to these super common questions.
If you have another burning question you’d love to see answered, let us hear from you!