When you can't defend yourself, your work will protect you?

The work of a non-profit executive director leaves a trail. It might be the work we did last year, the work we did three jobs ago, or the work we did when we first started. As our career takes us to different organizations, we might not always be around to answer questions about how we handled something or to defend our actions.

The most impactful place to safeguard your reputation and let your work speak for you, long after you retire, is inside your financial files.

Challenges an executive director might face.

Financial management is so much more than writing a few cheques or taking the deposit to the bank. Here are a handful of common financial situations you might encounter in general day-to-day non-profit ED work.

• The invoice for a workshop instructor is higher than the written agreement. Do you pay it?
• The phone bill shows charges for two office phones. Is that a mistake?
• You are clearing out a backlog of emails. You find an employee’s expense reimbursement request that you missed last week. Do you initiate a rush payment?
• You purchased digital gift cards for the staff team in December. Are you allowed to give the staff gifts?
• You used your mobile phone to deposit the only hard copy payment received all month. Is that safe?

Watch out for the looky-loos.

There are three sets of eyes that will review financial documents and will have questions. The second signer (common in non-profits), the auditor (most non-profits have some kind of year-end financial review), and future looky-loos (people who love any opportunity to snoop through old files trying to find error).

Keeping that audience in mind, should guide an executive director to implement a handful of financial documentation practices.

The standard hard copy cover page.

A document with a fixed set of details that is recorded as the first page for each and EVERY financial transaction. You can design what works for you, but I suggest these details to get started:

• Name of form.
• The date.
• Full name and address of payee/payor.
• Amount of payment made/received.
• What was the expense/revenue for?
• Why was it purchased/received?
• To what program does the expense/revenue belong?
• Who made the purchase, or received the payment?
• Notes.

Notes and references.

Simple notes can be recorded right on the cover page.

• The phone bill for two office phones? The organization has two home offices in the same city, each one has a phone. The explanation is simple.

Details that are more complex, might include attached reference documents.

• The workshop instructor fee that is higher? Include the email where the instructor agreed to provide special support for one student at an additional cost.
• The digital gift cards for the staff team in December? Include a copy of the board meeting minutes where a motion was made to give gift cards to the staff.
• The mobile deposit? Include a copy of the policy allowing you to make deposits by cell phone, highlighting the relevant lines.

Sometimes documents will come in well after a financial transaction has been completed. Add the relevant documents to the original package for reference.

• That employee expense reimbursement you missed? Send the employee an email noting that payment was made when/how, print that email, and attach it and the duplicate request to the original payment package.

Financial documentation has benefits.

An executive director’s role in non-profit bookkeeping extends beyond mere compliance. It is a dedication to transparency and ethical stewardship of the organization’s financial resources. AND it is a great place to protect your integrity and reputation.

Your voice when you aren’t there.

It doesn’t matter if an executive director handles their own bookkeeping or hires someone to handle it. The responsibility is the same. Using a structured approach to financial documentation can pave the way for strong accountability, transparency, and ultimately speak for you long after you have moved on.

Your turn.

Your turn. What do your financial files say about you? Are they organized, clear, and thorough? I want to know! Please use the form on the side of the page to let me know, ..or send me an email, ..or message me on socials.

-Christie

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Hi, I'm Christie. I help executive directors develop the systems and processes needed to run a non-profit.

I learned early in my career, there is no non-profit school. Browsing the internet for resources from big-city experts doesn’t provide practical solutions to balance the budget, write a work plan, or conduct an employee evaluation. Leadership development tips don’t really resonate when you are also taking out the recycling and cleaning the washroom.

I created ChristieSaas.com so non-profit leaders never need to wonder how to do the job – no matter how big or small that job is.

I have been the executive director of small-team, small-budget, non-profits for 20+ years. My experience isn’t theory. It is the real, operational, and practical solutions I use every day.

I love my work and I want to help you love yours too.

© Christie Saas 2024 All Rights Reserved

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