Any community project that is handling money on a regular basis needs to keep good records of its income and expenditure.
If you thinking of applying for funding it's also essential that you have good financial records as any funders will ask to see your most recent accounts.
Dealing with finances for food co-ops is often more difficult than for other small community projects because as part of their normal activity they may:
- deal with a large amount of cash income; i.e. notes and coins;
- find it hard to predict their income and expenditure due to fluctuating sales;
- have several different volunteers handling money at different locations.
It is therefore very important to have a set of simple financial procedures that everyone understands and can follow easily in order to avoid problems. It is also good to have standardised paperwork to record income and expenditure whenever your food co-op is running, for example by having a cashing up sheet for volunteers to fill in.
If you are setting up a buying club that is going to operate informally, e.g. as a group of friends, then you may not want open a bank account. The best way to avoid this is to get everyone to pay by cheque in advance direct to the supplier. If you have a bag scheme running where everyone orders and pays in advance you can also arrange to pay direct to your supplier.
Certain types of food co-op, such as box schemes in which customers have a regular order on a monthly basis can avoid having to handle cash by getting everyone to pay set up standing orders or pay by cheque. However, this is not really practical when running a stall or market and it is likely that most of the money you take will be cash.
Cash handling procedures:
- Always ensure you have a float for the same amount and that is checked by two people and is accurate both at the start and the end of the food co-op.
- Ask your volunteers to count up the money taken at the end of the food co-op and record this on a sheet. This should then be double-checked.
- Any food used throughout the day for tastings or promotions should also be recorded, as well as any wastage e.g. bad items that could not be sold.
- When counting cash, i.e. notes and coins, you need a secure space with a table on which to count and bag up the money.
- Banks require coins bagged up with the types of coins and the amounts as specified on their plastic coin bags.
- Pay your takings into the bank as soon as possible so that they appear both in your financial records and on your bank statement on the same date.
- If you need to keep any cash from one day to the next, make sure you have somewhere secure to store it, such as a lockable cash box or safe.
- Never make payments directly from cash received. Ideally, no cash payments should ever be made other than through Petty Cash.
- When paying suppliers try to use cheques where possible so that you have a clear record on your bank statement.
- If you do have to pay cash e.g. when buying from producers at a farmers market always get a receipt.
- All money paid out, including volunteer expenses, should have a receipt and you should record the goods purchased, the provider and the cost.