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Managing Organization Cash Flows (RE: credit/debit)
Posted on 8/4/15 at 4:35 pm
Posted on 8/4/15 at 4:35 pm
Sorry if this question is incredibly basic. I am on the board of a student organization. Our credit union has a policy against providing debit cards to student organizations. In the past, the officers have paid for "whatever" and are then reimbursed by the organization.
I understand the CU not wanting to take on the risk, but we are uncomfortable with the amount of risk our board members have to take on. Furthermore, many locations are unwilling to accept the "personal checks" the CU provided. Does anyone have experience with this or any ideas of an alternative process?
Thanks for y'all's help!
I understand the CU not wanting to take on the risk, but we are uncomfortable with the amount of risk our board members have to take on. Furthermore, many locations are unwilling to accept the "personal checks" the CU provided. Does anyone have experience with this or any ideas of an alternative process?
Thanks for y'all's help!
2
Posted on 8/4/15 at 4:43 pm to TFS4E
I'm afraid I don't have much to contribute other than to ask what risk the officers might be taking on? If they are spending on something authorized by the board then risk should be minimal if any at all.
Posted on 8/4/15 at 5:01 pm to foshizzle
thanks for the response. Risk might not be the best word but it boils down to issues with personal credit cards and reimbursements, sometimes payments are made by the university and take weeks/months to process (in the meantime board members are out 100s to 1000s), and overall the system takes time and is predicated on board members having credit cards or enough cash to foot bills before being reimbursed. It's simply a messy process.
Like I said, risk may not be the right term in this case.
Posted on 8/4/15 at 5:08 pm to TFS4E
Ah. Yeah, if it takes weeks to get the money back that makes sense.
Can you get an operating account set up that requires joint signatures by board members? Maybe that will keep things straight.
Unfortunately the biggest problem is probably that the account will be too small to be worth the credit union's time to work with you that much.
Can you get an operating account set up that requires joint signatures by board members? Maybe that will keep things straight.
Unfortunately the biggest problem is probably that the account will be too small to be worth the credit union's time to work with you that much.
Posted on 8/4/15 at 5:27 pm to foshizzle
It's currently setup where it requires president and treasurer signature, but for payments over $5,000. Unfortunately, that doesn't help with the reimbursement hold ups (red tape). The organization can (sometimes) eat a $5,000 payment until the university steps in, an individual board member can't.
Posted on 8/4/15 at 6:08 pm to TFS4E
quote:
Unfortunately, that doesn't help with the reimbursement hold ups (red tape).
Yep. Unfortunately it doesn't get any better after school either, most companies take a month or two (at least) to cough up approved reimbursements for employee travel.
Posted on 8/4/15 at 6:13 pm to TFS4E
Is there reason your limited to using the CU? Can you go to a retail bank?
Posted on 8/4/15 at 6:59 pm to iAmBatman
Get the credit union to cut Cashier's Checks for major expenses
Posted on 8/5/15 at 9:10 am to Hoyt
quote:
Get the credit union to cut Cashier's Checks for major expenses
We discussed this as an option, and will likely use this route. Thanks for all of your comments, guys.
Posted on 8/5/15 at 9:50 am to TFS4E
The easier solution is find a bank that is willing to give you access to your checking account.
If I am understanding this correctly...
Your org has a checking account with the CU...
...but the CU won't allow you to spend that money unless the school is already providing proof of reimbursement/it is a legitimate expenditure?
If the organization has been appropriated funds for the fiscal year, then the CU should be comfortable allowing your organization to spend up to that threshold. Where is the risk for CU? (even if the board members were to abuse the account...they would not be able to spend more than the appropriated amount).
In a year following abuse, I would presume the school would want line item reporting that shows how the appropriated funds had been spent...at which point the org would be 'caught' for wasting funds and would be defunded in the current fiscal year.
I may be off on a tangent
If I am understanding this correctly...
Your org has a checking account with the CU...
...but the CU won't allow you to spend that money unless the school is already providing proof of reimbursement/it is a legitimate expenditure?
If the organization has been appropriated funds for the fiscal year, then the CU should be comfortable allowing your organization to spend up to that threshold. Where is the risk for CU? (even if the board members were to abuse the account...they would not be able to spend more than the appropriated amount).
In a year following abuse, I would presume the school would want line item reporting that shows how the appropriated funds had been spent...at which point the org would be 'caught' for wasting funds and would be defunded in the current fiscal year.
I may be off on a tangent
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