Finance Committee Duties
One of the key sub committees in a club is the Finance Committee. The Finance Committee should meet regularly, preferably weekly to ensure that the key controls operated by the club are kept under close scrutiny. The duties of a Finance Committee will vary from club to club but the checks it undertakes should include the following. These checks if performed properly will help prevent many of the financial losses suffered by clubs.
Duties in relation to the payment of monies out of club funds are equally important.
Since the introduction of the minimum wage and further employment legislation wage costs are becoming an increasingly larger expense to clubs, and overpayment of wages can be very costly. The weekly computerized payroll summaries should be reviewed to ensure they have been properly completed. Bar staff names, hours and wage rates should be checked to ensure staff are receiving the correct amount of gross pay. Employees will always complain about underpayment of wages but complaints about the overpayment of wages are less frequent.
The overall cost of the weekly gross bar wage costs (including national insurance) should be compared to the gross weekly bar takings. Ideally this percentage should be less than 24%. If the percentage is greater than this it would indicated that bar staff are not being fully utilized, if percentage are below this it may be an indication of other problems, for example, members are waiting to be served. There may be valid reasons why the percentages will be outside these ranges but the key is to ensure the percentage is not increasing.
Another key ratio is that total wage costs including cleaners and committee should not exceed 65% of the gross profit recorded by the stock report and annual accounts. If the ratio is above 65% it usually means the club is suffering a loss because there remains insufficient income after wage costs to cover the other running expenses of the club.
The Finance Committee should review and check the stock report prepared by the club’s stocktaker. The committee should review and make enquires into:-
The stock sheet allowance book should be scrutinised. Items in this book can be varied in nature, ranging from line cleaning, waste, breakers, raffle prizes, brewery credits, checks etc. The Committee should examine this book, to ensure that items claimed are authorized and that claims for waste are not excessive.
5. GOODS RECEIVED BOOK
All resalable goods, including free stock given by suppliers, must be recorded in the goods received book by the Steward from the supplier’s delivery notes. This book detail is then used by the Stocktaker to assess purchases made during the stock period.
The Committee should check entries in the Goods Received Book against suppliers statements and invoices at least monthly to ensure that:
Please note this test is of little use if the check is against delivery notes only. This is because it is important to check that all payments for goods for resale are entered in the goods received book and this will not be picked up if delivery notes have been omitted.