Following is a transcript of this podcast episode, with audio/video below.
Welcome to the Two-Minute Treasurer’s Tip Podcast. I am your host Cyndi Meuchel with MoneyMinder where our goal is to make your life as a volunteer
Addison writes in: My group has cash on hand to make change at events. I just learned that our treasurer has $200 on hand at all times. Is that wise?
Well, petty cash is meant to be used on a short-term basis. For example, you take it out of the bank to do something like make change at an event. Then you put it back in after the event is over. It’s not typically meant to have on hand all year long. I know that some groups do that.
Here’s why you might not want to do that. Even if it’s kept in a safe, locked place, if it goes missing, you have some explaining to do. Do you want that liability? And the potential to lose the trust of your board and members if something happens? That’s a big risk for a few hundred dollars in my opinion.
Something I commonly see are groups that don’t even account for it on their reports. That’s not complete transparency of your books. Another concern is when the board transitions, how would a future board even know it exists?
Unless you hold weekly activities that you need cash for, you should never hold onto cash for “later” or next week. Keep it in the bank so issues don’t arise that can easily be avoided. That’s my suggestion.
That’s it for today! Thanks for listening! If you have a question you’d like answered, just email it to me at [email protected] My name is Cyndi Meuchel and this is your Two-Minute Treasurer’s Tip for today.