Are you ready to tackle one of the most crucial tasks in the charity sector? Today, we’re diving into the world of financial reconciliation and learning how to reconcile finances effectively—a skill that can set you apart early in your career. Don’t worry if it sounds daunting; we’ll break it down into manageable steps so you will become your charity’s go-to person in no time.
Why is this important, you ask? Think of it this way: by reconciling your financial system with your Customer Relationship Management (CRM) system, you become the key player who brings clarity to your organisation’s finances, effectively linking the finance team with the fundraisers. It’s a bit like playing a detective; piecing together clues to create a clear financial picture and “cracking the case.” Exciting, right?
Let’s get started with the key steps:
1. Start with the Bank Account as Your Source of Truth
Think of your bank account as the impartial judge in the world of finances. It provides an unbiased, third-party record of all transactions. This is your starting point – your North Star in this reconciliation journey.
2. Implement a Clever Reference System
Here’s where you get to flex your organisational muscles. Create a system for recording references that link your bank statements to your CRM entries. It could be as simple as noting the bank transaction ID in your CRM for each donation or payment received. Think of it as creating a trail of breadcrumbs between your systems.
3. Master the Art of Date Tracking
For each transaction, you’ll want to record two key dates:
- a) The date the money was given
- b) The date it was recorded in the bank account
This dual-date system helps you understand the full journey of each donation and account for any processing delays.
4. Don’t Forget About Cheques and Cash
In our increasingly digital world, cheques and cash require special attention. Develop a process for recording these in your CRM as soon as they’re received, even before they appear in your bank account. Then update the entries once the funds clear. It’s a bit like tracking a parcel from order to delivery!
5. Be a Champion of Collaboration
Here’s your chance to shine as a team player. Encourage open communication between your finance team and those managing the CRM. Organise regular catch-ups, set shared goals, and create clear processes. Remember, you’re not just reconciling numbers; you’re bringing people together!
6. Spread the Word on Why Accuracy Matters
Become an ambassador for precision. Help your colleagues understand why matching CRM reports with financial reports is crucial. When fundraisers trust the numbers, they can work wonders with donors. You’re directly contributing to your charity’s mission!
7. Stay on Top with Regular Checks
Don’t wait for the year-end crunch. Implement a schedule of regular reconciliations – weekly or monthly, depending on your transaction volume. It’s like giving your bicycle regular tune-ups; a little effort often saves a lot of trouble later.
8. Keep an Eye on the Future: Consider Automation
As you progress in your career, keep abreast of software solutions that can streamline the reconciliation process. Many modern CRM and accounting systems offer integration features that can save hours of work. Who knows? One day, you might be the one championing new tech solutions in your organisation!
The Bigger Picture
By mastering this reconciliation process, you’re not just balancing numbers – you’re building trust, empowering decision-makers, and directly contributing to your organisation’s success. How brilliant is that?
Remember, every financial wizard started somewhere. This could be your first step towards becoming a charity finance guru. Embrace the challenge, ask questions, and don’t be afraid to make mistakes – that’s how we learn and grow.
So, are you ready to become the reconciliation hero your organisation needs? Trust me, your future self will be chuffed with the skills you’re about to develop. Let’s get cracking and make those numbers work for you! And if you have any questions, the team at Actually Data Analytics are always here to help you succeed!
