Financial Report for Dummies

The written part was made by the SkopjeEnschede AC.

Budapest Zaragoza AC decided to improve the manual in news and layout. Audit Commission Budapest Zaragoza Michele Minuti (AEGEE-Brescia) Ilona Bogomolova (AEGEE-Kyiv) Tina Pance (AEGEE-Ljubljana) December 2012

Financial Report for Dummies

In this guide you will find some practical information on how to do your financial report. We know that some locals and WGs have finance-lovers that obviously dont need it, but also some of you that see it as a punishment. Well, dont! We dont hate you, we just believe in transparency and also that it is very good for you to keep record of your money! (like when your mum tells you to eat vegetables!) We hope that after reading this guide, youll be ready and willing to fulfill the antennae criteria about sending your Financial Report! Lets get started! Audit Commission Skopje-Enschede Esperanza Rodrguez Medina, Anna Gots, Tim de Jong Special Thanks for: Alberto Cuesta Noriega (AEGEE-Oviedo) Dmytro Kononenko (AEGEE-Kyiv) January 2012

According the CIA

News From Autumn Agora Budapest
ANTENNAE CRITERIA Article 3: Antenna 12. Submit a yearly financial report, subject to approval by the Audit Commission during the first quarter of the calendar year or on demand of the Comit Directeur;

According the CIA

GENERAL FINANCIAL RULES III BOOKKEEPING

News From Autumn Agora Budapest

Article 15: Financial reports criteria for Locals All financial reports sent by the AEGEE Locals in a due way and within set time lines shall meet next conditions: The balance is in balance (Total Assets = Total Liabilities). All the data are filled in. The difference between the opening and the closing balance matches the profit/loss. The opening balance of the current financial report is equal to the closing balance of the previous one. The declared fee payment is the result as checked upon with AEGEEEurope records. Consequently, in case there is a debt or credit towards AEGEE-Europe, there must be consistency between declared expenses, credit or debit and AEGEEEurope records. The Financial Report shouldnt present any signs of inconsistency or fraud.

Financial Report for Dummies

GENERAL INFORMATION So after your New Years Eve hangover is gone, you may want to start thinking about the Financial Report. Its recommendable that you are subscribed to BOARD-L and Treasurer-L, so you can get the reminder with the current version of the Financial Report and the deadline. The Financial Report form is relatively permanent, but it may be improved from year to year, so its better if you wait until you receive the updated version to complete it.

NOTE This doesnt mean that you can forget about your finances: you should do your bookkeeping during the whole period! Its really annoying to find yourself with tons of bills at the end of the year!

Financial Report for Dummies

DO YOU NEED THE EXTENDED VERSION? Most of you will probably find in here everything you need to fulfill your Financial Report. However, there are some antennae which the items that will be described are not enough for them. Last year it was implemented an Extended Version for those. If you have one of these items in your Balance Sheet, then you may need to use it: Inventory Debtors Creditors Reserve Depreciation If this is the case, please, contact Audit Commission.

Financial Report for Dummies

Financial Report for Dummies

THE FASCINATING WORLD OFACCOUNTING... You have to distinguish two elements: Profit and Loss statement and Balance. The Balance is a picture of how you were at the beginning (Opening Balance), and then, at the end of the period (Closing Balance). Like those advertisements for losing weight! The Profit and Loss is the story. It tells what happened in between of those two! So did you exercise a lot and eat healthy? Or did you play videogames while eating fast food? We see the evolution of your incomes and expenses during the year, to tell how youve got from your opening balance to your closing balance.

NOTE the opening balance of one period is the same as the closing balance of the previous one.

Financial Report for Dummies

DATA THAT WE NEED You have to fill some basic data as your name, local/WG, phone number. And very important: your financial period! It could be that due to legalities in your country you open the financial year in January or in September. So be careful and clarify that!

The Profit and loss

Expenditures money you use for something! Income money you get!

The Profit and loss

THE PROFIT AND LOSS EXPEDITURES
Overhead Costs These are the most common expenditures, the ones that most locals/WGs have. If theres some that you dont have, just put a 0. It includes: Telephone and Fax costs Printouts and copies Office Material Office Rent (in case you have to pay for it) IT costs (those linked to your website) Bank costs Other overhead costs: Any other kind you may need to include. Just write what they are on remarks! An example: if you pay membership fees to the National Chamber of Commerce or any other national/local corporation.

The Profit and loss

Fees These are the fees that you paid to AEGEE-Europe during the period. There are two kinds: Membership fees: Your antenna pays to AEGEE-Europe 25% (with some exceptions) of what you collect from your members. The payment is splitted in two, so you pay before (or during) every Agora, depending on the number of members you have. If your financial period starts in September, you should take what you paid before Budapest and Rhein-Neckar. If it started in January, then you should take Rhein-Neckar and Zaragoza. (Remark: We are not talking about the fees for attending Agora, paid to the organization! But the ones that mean that your local is still a member of AEGEE) SU application fees: For every member that applied for a SU you have to pay 2.5. This payment is done before Autumn Agora (so Budapest or Zaragoza, depending on your financial period). Again, we are not talking about what they paid to the SUs attended!

The Profit and loss

Activities Here you need to include all the expenses that were made due to the different activities that you organized during the year: food, lodging, transportation, tickets, materials There are 3 different kinds of activities that you may organize, so you need to put every expense in the right place: Local Activities: whatever kind of activity that you organized for your members and/or other people at the local level. Also LTCs or RTCs. Summer University: all those expenses that you already included in your Summer University Financial Report (in case you organized a SU last summer, of course). European activities/Conferences: any other European events that you may have organized (if any) such as Winter Events, European Schools, NWMs, Exchanges, Conferences or any other kind of events opened to the network!

The Profit and loss

Other Costs These include some other typical expenses that were not included in Overhead costs: PR/Publications: like magazines, payments to designers Merchandising: all those nice things that you made with AEGEE logo (pens, stickers, t-shirts) Travels: any kind of reimbursement that your members may have received for travelling and attending events. Unforeseen Costs: Those unexpected expenses that you didnt include in your annual budget. Dont forget to explain them in remarks! Other costs: if you had some other costs that arent included somewhere else, this is the right place for them! (Also dont forget to define them in remarks). And voil! You have the total amount that you spent!

The Profit and loss

THE PROFIT AND LOSS INCOMES
Subventions Money received mainly from institutions after having applied for it, such as: University Local Government Other (YiA, National Government, Foundations) If they werent general subventions, but were granted for a particular project, please specify that in remark!

The Profit and loss

Sponsors & Interest Money received from fundraising from private partners such as companies. It could be: In Money (write the total amount) In Kind: You need to estimate how much it would have cost if you had bought it. So if they let you use a place for free, then how much would be the rent? Or how much were the food/beverages/materials that they gave you? (Yes, you need to go to a shop and check prices!)

NOTE If you received sponsorship in kind, it means that either you consumed it for an activity (so you need to include that amount in its expenses, even though you didnt pay for it) or it was inventoried material that you still have (so you need to include it in the balance this is available only for the extended version).

The Profit and loss

Fees Very related to the same item on the expenditure side! Membership fees: Money received from members. Do you distinguish different kinds of members and do they pay different fees accordingly? Do you have different fees for new members and for the renovations? Then, specify how many paid how much in remarks. If all your members pay the same, just put the whole amount collected.

NOTE !: If you have some delayed members, that havent paid yet, but they should have done that, and you are pretty sure that they will, you need to include them too! SU application fees: If you ask your members to pay an extra fee in case they applied for a SU, then you have to put it here. If not, dont forget to put a 0!

The Profit and loss

Activities Its not very likely that you organized your activities for free (at least not all of them). So the participants paid a fee. You should include all the money collected from them here! Take in mind that you have the same categories here as on the expenditures side, so be consistent! This is very useful to realize how good you are at adjusting the fees and the costs of your activities!

The Profit and loss

Other Interest income: if you receive money from the deposit kept in a bank. Other income: if you had any! Please, define in remarks! And voil! You have the total amount that you collected! And voil (again)! You can see if you had a profit or a loss this period!

NOTE !: As a nonprofit organization, you shouldnt have profits or loses But its unlikely that you are such a good planner! So if you have a 0 here, you probably did something wrong! If you have a loss, it means that you had to use debt or money remaining from previous years to cover all your expenses. If you have a profit, it means that next year you can use that money for your future activities! Its always wise to save some money.

THE BALANCE SHEET

ASSETS
Assets are things that you own. In this case we distinguish Cash and Bank account. Opening Balance: The money that you had (in cash or in the bank account) at the beginning of the period. Remember that its the same as in the closing balance of the previous year. So if your financial period starts in January, then you have to say how much you had the 1st of January. Closing Balance: Here you include the money that you had at the end of the period, so if it started in January, then how much you had the 31st of December. Notice that this should be the amount that you will include in the Opening Balance next year!

THE BALANCE SHEET

Usually you dont have any debts, so all the money that you own is considered as equity. So, just include the whole amount! In case you have something else, then take a look at the extended version explanation! For the closing balance the profit/loss will be automatically added to this side. For the opening balance of the following year you will count it as equity. BALANCE CORRECTIONS It may happen that you received or paid some money that should have been included in previous years bookkeeping but it was noticed later than the time of closing the 2011 Financial Report. Or maybe your predecessor made a mistake when closing the balance and now you have a mismatch. Then, this is the right place to include it!
NOTE: The balance has always to be in balance! This means that both sides should be the same. If you had a profit, your closing balance is bigger than the opening, because you have extra money in your assets. If you had a loss, then you have less money than at the beginning (this difference has to be equal to your profit or loss). So this is how it is all connected! Did you grow bigger?

LIABILITIES AND EQUITIES

Financial Report for Dummies

WHAT TO TAKE SPECIAL CARE OF: Remember that Audit Commission will be checking your financial report. These are the minimum requirements for a good Financial Report: The balance is in balance (Total Assets = Total Liabilities). Everything has been filled in. The difference between the opening and the closing balance matches the profit/loss. The opening balance of 2011 is equal to the closing balance of 2010. The declared fee payment is equal to what AEGEE-Europe actually received. If you use the excel file, you have got those results in the first rows