Advice. What are the best practises for club and non-profit signatories ?

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Forums › Finance and wealth management › Advice. What are the best practises for club and non-profit signatories ?

davcomnz

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#304185 11-Apr-2023 21:39

Please move this post to the correct forum if this is not the right one.

I've been asked to be a signatory for a non-profit organisation.

Seeking advice on what are best practises for how signatories authorise requests.

Some documents may need to be signed at a committee meeting, but many times a request for a financial co-signing may be requested between meetings.

Since we haven't had cheques in NZ for a couple of years now (July 2021) that might need co-signing (2 out of 3 signatories), how DO signatories authorise a request from 1 signatory (let's say Treasurer) electronically these days ?

I don't want to drag our wee non-profit into the electronic signature ball-game, a few of them don't even have a mobile phone !

If there's anyone that has encountered this situation, that as a club/non-profit signatory they have been requested to authorise a financial request, what process needed to be put in place to satisfy accountability. Swapping emails ?

I'd like to take some solid advice into the next meeting, before I accept what will be presented, so everyones aware of what NZ's best practises in this situation are.

If anyone has links to govt sites, wherever, that advise either legal or electronic requirements for this, gratefully received.

(For eg. Sport NZ's _current_ (11/4/2023) best advice is that "2 signatories are required to sign cheques"... erm ... we haven't had cheques for 2 years guys so ... yeah that doesn't float.)

I haven't yet found any decent information on how signatories interact when authorising financial requests.

How do you do it ?

davcomnz

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#3061677 11-Apr-2023 22:39

To be fair, my reference to Sport NZ doesn't show that they otherwise have some excellent advice for setting up a club structure.

Perhaps they too are in the position that there is no recognised practise for electronically handling financial requests between signatories in this day and age ? (as opposed to not having reviewed and updated their advice).

For reference we do have yearly funding that we apply for and receive, and it is one of our functions that expenditures from this funding occur at irregular intervals, between meetings, that do not require the whole committee to convene, and are expected to be done, but each expenditure still needs ratifying by at least 2 of the 3 signatories, so, how do they prove, outside of a meeting, that such expenditure is warranted/agreed to ?

OldGeek

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#3061703 12-Apr-2023 08:06

Internet Banking does it. For the organisation, there are separate logons for each signatory. If any payment is initiated then the other signatories are notified and can log on to authorise. Once the required minimum of authorisations has been met the payment is made.

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SirHumphreyAppleby

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#3061706 12-Apr-2023 08:25

OldGeek:

Internet Banking does it.

Be prepared for months of effort trying to get it setup and working properly too.

evnafets

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#3061722 12-Apr-2023 09:14

As the treasurer of a club, I can confirm both of the above posters speak the truth.

The club I volunteer for is with BNZ, and we use the "Internet Banking for Business" - accessible via web and business banking app.

The app itself works well. I set up the payments (equivalent of writing out the cheque), President/Vice President/Secretary can 'approve' the payment once it is set up.

It is a huge improvement over manually signing and mailing cheques.

It is also a real pain in the proverbial to get people signed up as 'signatories' to the bank account (AML laws) and then getting them set up on the app.

The bit about being prepared for months of effort is not an exaggeration.

davcomnz

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#3061776 12-Apr-2023 11:52

Thanks for the replies. Have changed my focus from "what should the organisation do for best practises" to "What does the bank provide to handle this". Cheers.

OldGeek

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#3061826 12-Apr-2023 11:58

davcomnz:

Thanks for the replies. Have changed my focus from "what should the organisation do for best practises" to "What does the bank provide to handle this". Cheers.

Which bank is this - just curious.

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JPNZ

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#3063282 13-Apr-2023 16:45

evnafets:

As the treasurer of a club, I can confirm both of the above posters speak the truth.

The club I volunteer for is with BNZ, and we use the "Internet Banking for Business" - accessible via web and business banking app.

The app itself works well. I set up the payments (equivalent of writing out the cheque), President/Vice President/Secretary can 'approve' the payment once it is set up.

It is a huge improvement over manually signing and mailing cheques.

It is also a real pain in the proverbial to get people signed up as 'signatories' to the bank account (AML laws) and then getting them set up on the app.

The bit about being prepared for months of effort is not an exaggeration.

I am also a treasurer for an incorporated club and we use BNZ Banking for Business too. Its great, I do the first authorisation then one of 3 other committee members can access the app and approve the payment(s).

I cant quite remember all the info the bank needed, but it was quite a bit from memory. HTH

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davcomnz

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#3063330 13-Apr-2023 20:03

OldGeek:

davcomnz:

Thanks for the replies. Have changed my focus from "what should the organisation do for best practises" to "What does the bank provide to handle this". Cheers.

Which bank is this - just curious.

I'm relatively new to the organisation but I believe it's ASB so it'll probably be their "Two to Sign" account.

Handle9

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#3063338 13-Apr-2023 20:23

Just to add to the above, despite the hassle of getting signatories added don't be tempted to only have one signatory.

I've been part of a club where embezzlement has happened. It sucks for everyone involved.

Goosey

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#3063342 13-Apr-2023 20:34

Right Ho…
Here’s how it’s commonly done for incorporated societies and clubs
(Best practice)

During normal regular meetings ensure the minutes are accurate reflections of the discussions and decisions being made. Always have a motion formalised by a mover and seconder.

This acts as proof for the financial or otherwise decisions being made
Banks often ask for copies of such minutes as proof of decisions.

As for actual financial transactions many banks offer dual signature approvals electronically.
You can have multiple approvers.
This works by say having the treasurer administer the accounts however when payments are to be made then this is set up by the treasurer and then the second signatorie then has to log in and approve. Obviously this is mandated by the meeting minutes.

For everyday bill payments then that should be ratified by a motion set at the first annual meeting or the annual general meeting and such powers should be refreshed each AGM.

The incorporated societies website has some good resources to help you administer a club. Best practice is to follow that. I believe sport nz also has some guides as well.

If your club doesn’t have any formal rules then I suggest you try develop these covering off the basics of everyday stuff to future proofing and wind up. Such topics could included rules around branding, uniforms and how to change the club rules and practices.

Hope this makes sense?

Edit
To set up signatories at the bank, have a chat to them but you will need formal proof by way of meeting minutes and all your signatories will need to turn up to the said bank and fill out the form / give ID etc. Chet to the bank e.g. BNZ and they will tell ya what you need to do.