School Parent Groups are known for their fundraising brilliance. Parents, teachers, faculty and students do amazing work creating new ways to pay for everything from new playground equipment to classroom supplies. But let’s get down to the brass tax of this post: what happens after the money comes in?
Why Finances Matter to School Parent Groups
There are several reasons that financial best practices should be followed for school groups. For one, accurate finances can help prevent fraud in your group. And they can help avoid mistakes. After all, a group that is centered around education does not mean everyone is good at math. Finally, although it sounds counterintuitive, taking the time to get your books in line can actually save you time in the long run.
This is true no matter what type of parent group you participate in…
- Parent Teacher Association (PTA)
- Parent Teacher Organization (PTO)
- Parent Teacher Student Association (PTSA)
- Booster Club
- Parent Advisory Council (PAC)
- Parent Faculty Club (PFC)
- Parent Teacher Club (PTC)
…or a plethora of other 3-letter combinations.
When You are Handed the Treasurer Reigns
Once the proverbial treasurer’s baton gets handed to you, it’s time to hit the ground running. Being treasurer is a big job, but it doesn’t have to be overwhelming. Use as much time as you can with your predecessor to get to know the treasurer’s software your organization uses. If you’re using a web based app like MoneyMinder, managing user roles and getting up and running is a cinch.
Be sure to make note of your PTO’s Tax ID or EIN number, bank account number and any other important items the former treasurer passes along. We’ve made a list of items we call the treasurer’s bin—things a PTO Treasurer may find nice to have on hand—for your convenience. Finally, review any existing budgets and gain clarity before finalizing your budget for the year.
PTO Treasurer Tips for Best Practices
Being that we just celebrated 17 years building a web app that aims to be the simplest way for volunteer-based groups like PTOs to manage their finances, we’ve written a LOT about the subject. We make our articles free for all because we never want lack of funding to preclude accounting accuracy – which we tie to success.
Budgeting & Forecasting
We believe the PTO’s budget is a building block to sound financial management. When you take over as treasurer, there should already be a budget in place that is based on prior years’ activities. Things like annual fundraising activities can tend to bring in a reliable amount of money. That said, you may need to make adjustments to your forecasted revenue in years that are out of the ordinary. For example, a global pandemic certainly doesn’t lend itself to events like bake sales.
If you aren’t sure how to adjust your budget, the Budget Analysis Report from MoneyMinder shows you different financial outcomes for a variety of scenarios.
As we mentioned, fundraising is one of the things PTOs are most known for. Even if your events had to go virtual for the foreseeable future, this is the main way that parent groups bring in funds to help students. You can find hundreds of fundraising ideas on our blog.
Whether it’s a jog-a-thon or a calendar sale, the main thing to keep in mind is receipts. Receipts in this situation go two ways. Be sure to keep a sales receipt for any expenses incurred to hold the event. If your group is a 501(c)(3), be sure to also provide the donor with a donation receipt.
When Money Comes In
You want every penny of your funds to be allocated toward their intended purpose. So it’s important that money is handled properly from the moment it is received.
If you’re handling cash, like at an event, try to limit the number of hands that touch it. This is precisely the reason why, from fairs to carnivals, there is one central ticket booth as opposed to payment at each one. More hands, more opportunity to pocket a few extra bucks.
On the flip side, be sure multiple people are present when it comes time to counting your earnings at the end of an event.
If you accepted cash, deposit it to the bank as soon as possible. By this, we mean same day or the very next business day. If you are using a credit card processing app to accept money your next steps will be digital. If your treasurer software allows for bank integration, you can eliminate the step of importing those manually. From there, you just need to reconcile.
Reconciling Your Bank Account
Bank account reconciliation helps you compare your financial records to your bank account to ensure you are entering everything accurately. It can help uncover mistakes so you can ensure you’re maintaining accurate records.
Reconciling your bank account also helps to prevent fraud. When the board can see that the bank balance agrees with the checkbook register, and that each check and deposit are accounted for, they can be assured that nobody is absconding with your group’s hard earned money.
How often should you reconcile your books? We recommend once per month. Errors such as number transpositions, forgetting to record a transaction or recording one twice can throw your books off balance. If you wait too long to correct these issues, it can be a real chore to track them down months in the future.
Taxes & Year End
Like it or not, your exempt PTO must file taxes in the form of a 990, 990N or 990EZ every year. They are due by the 15th day of the 5th month after the end of your fiscal year. So if your fiscal year ends June 30th, the form is due November 15th.
We recommend creating a monthly financial report for members. Most parent groups have regular meetings at which these could be presented. At the very least, this should be done quarterly. Reports must be accurate and actionable to support financial decisions. They can be used by the PTO treasurer to support his or her gut feelings on whether the group can afford what is being proposed by the larger group.
Still using Excel spreadsheets and old emails to manage your PTO or PTA? Give MoneyMinder a try for free. There’s no credit card required and we have a forever free edition that you can use if you decide not to upgrade to PRO after 30 days. Still not sure? Our demo is online and viewable at any time. No email required.