Advanced Management Concepts is responsible for association budgets totaling nearly $3 million annually. With this level of responsibility AMC appreciates the need for good accounting systems and effective financial control.
Sound finances and financial management is the foundation of any successful organization. Prudent financial management begins with good accounting systems and practices. That's why AMC has developed strong human and systems resources for accounting. We employ flexible accounting software and spread sheets to record financial data and present it in readily usable form. Our staff is fully capable of using the systems resources effectively.
We recommend that books be maintained on an accrual basis, modified by recording dues on a cash basis. We employ functional accounting using a detailed chart of accounts to aid in close analysis of expenses and facilitate the budgeting process.
As you review this section please keep in mind that any policies, procedures, or methods can be modified as you see fit. Through our experience we have developed some opinions on the most efficient ways to handle organizational finances and financial reporting, but the important thing is for us to implement a system that is comfortable to the elected leadership.
Deposits, Disbursements & Investments
We normally use a two-account structure for the management of client cash and equivalent assets. Revenues are deposited in accounts bearing the maximum interest consistent with safety and liquidity, and are transferred to a checking account as needed. When cash flow projections indicate a significant surplus that will not be needed for a known period has accumulated, we recommend shifting at least a portion of these funds into higher yielding securities, such as certificates of deposit, money market funds, or treasury notes.
Disbursement policies vary among organizations. In some cases a list of payables is sent to the elected treasurer for item-by-item approval before payment. In other cases, the executive director is authorized to pay routine, budgeted, and specifically authorized expenses without specific approval. Expenses of this type include telephone, printing, copying, and postage; meeting expenses; legal and consulting fees.
Reports & Control Documents
If there is a reason for a financial or management report the staff will produce it. We suggest, however, that it is easy for fall into the trap of producing reports for the sake of producing reports.
Although we keep accounting records in great detail to facilitate the budgeting process, we do not believe in burying officers and directors in a mass of figures. Our experience indicates that the most experienced elected leaders insist on the most concise and understandable financial reports.
We believe information quality, not quantity, is the key to monitoring your association's financial position. We will work with the board and your elected treasurer to develop the accounting data and financial reports you need.
The professional staff will develop a draft budget based on past experience and activity schedules provided by the various officers and working committees. This budget will be submitted for board action prior to the end of the fiscal year.
We recommend that performance against budget be tracked by computer. (It may seem strange that we would have to make such a recommendation, but a few clients have declined to budget in sufficient detail to make it possible for us to produce meaningful performance to budget information!)
AMC will procure all necessary and approved insurance. In addition, AMC will, upon request, show evidence of insurability and bonding in the appropriate amount.
All employees of AMC, including mail room clerks who regularly handle the mailing of checks, are bonded.
AMC will prepare and file all forms, documents, and reports required by local, state, or federal governments, including income tax returns, tax exemption applications, workers compensation reports, and similar documentation.