Background
Prior to joining Association Acumen, this association’s board was not receiving clear, transparent, timely financial services from their association management company (AMC). Without timely, accurate financial statements, they did not understand the financial health of the organization.
Challenge: Investigating the Why
Association Acumen’s challenge was to investigate why this was occurring, determine the root causes behind the problem, and reverse the situation as quickly as possible.
Solution: Creating Clean Financials
Association Acumen staff began by providing transparency by sending out clean financials by the 15th of every month for the previous month. Strict timelines and bill processing/approvals were adhered to for all expenses. A treasurer’s packet was sent monthly that also greatly clarified the financial picture. The packet included the following items:
- Bank and investment statements
- Summary of deposits and payments for the month
- Monthly credit card transaction detail report
The Executive Director played a key role by offering to meet with the treasurer and providing key trends and data points developed for presentation at board meetings. This empowered the treasurer to better understand the role. Real-world accounting best practices were utilized that did not overcomplicate the financial situation. Clear, straightforward documents that were easy to understand were produced and shared with the board, including key performance indicators and dashboards that allowed for viewing organizational health at a glance.
The key performance indicators included statistics on net profit and profitability, net assets, top expenses presented as a percentage of total expense, and top revenue sources as a percentage of total revenue. Plus, online dashboards were developed and updated regularly for board members to easily access membership numbers, annual conference registration counts and revenue, sponsorship and advertising revenue, and liabilities and net assets, all in real time.
Outcome: Board Reaction
Within a few months of being an Association Acumen client, the board gained a true picture of the association’s financial health. They had fewer questions when reviewing the financial statements at their monthly meetings. Budgeting has become easier and more manageable. This clarified decision-making and forecasting. Board members truly appreciated Acumen’s effort and said it made their job easier and much more efficient.