Managing Football Club Finances: A Guide
The long term success and prosperity of a football club is dependent on healthy finances, but often this is an area where football clubs (or any sports club) fall short.
There is so much to think about on a day to day basis that sometimes the bigger financial picture can be lost, and costs can spiral out of control. However, the positive side to this is that there is usually plenty that can be done to improve a football club’s finances. From everyday procedures and tighter budgeting practices to finding new ways to generate income, here is a simple guide to managing a football club’s finances for long term success.
Money Management Practices
Monitoring your club’s finances is the first step to effective management. It can seem like a dull or labour intensive task if not done well, but introducing more efficient and accurate process with simple reporting can change this. There are some simple habits to consider adopting to simplify your money management processes, but it’s vital to find a system which works for you month to month.
At the end of each month, you should check your bank accounts to ensure incomings and outgoings are as expected. If anything is not as it should be, you need to investigate and ensure you find out why.
Your personal finances should be separate from the club. By doing so, this not only keeps money management much simpler but will also prevent errors and mix-ups, which could be tantamount to fraud in the eyes of the law.
Your club should have a bank account of its own, which requires two signatories before a payment or withdrawal can be made to prevent errors and fraudulent activity.
If your club has stock such as bar food and drink, kit and equipment, you need to keep detailed records of your inventory and carry out stock checks on a regular basis.
Your club should have an expenses policy which sets out what is acceptable to be charged to the club and what isn’t. All purchases should be in line with this policy and backed up by receipts.
When the financial year comes to an end, you need to put the club’s annual accounts together. A professional accountant or a club treasurer should do this task. If a professional accountant does not prepare the accounts, they will need to be checked by someone with appropriate financial expertise. To ensure you’re meeting your accounting obligations, you should check the information on either Companies House (if you’re a limited company) or the Gov.uk website (if you’re a charity).
Clubs which are membership-based should be transparent in their accounting and should publish the annual accounts either by email to members, in a newsletter or on your website.
Transparency is key, so it’s often a good idea to make financial reports simple and to show your members and shareholders where their money is being spent.
Managing a Budget
Budgeting should take place on both a short term and long term basis. Your short term budget should outline both daily, monthly and quarterly outgoing and incoming funds, while the long term budget includes funding for 3-5 years. A budget needs to be realistic, and it’s often better to overestimate what you plan to spend. If you are able to stay under-budget, you can always revise your budget for the following year. If you underestimate costs, you will find not only that your staff quickly become demotivated but it can get your club into serious financial difficulty.
To get started on a budget, look at what was spent last year against your income. Doing so will highlight any areas where you need to be cutting spending, which could be as simple as getting your office supplies or kit from a cheaper supplier. Shop around for better deals, and you may be surprised how much you could save. For example, Cartridge People specialise in low-cost printing supplies, including paper and ink, which could make a real impact on your bottom line.
While the club treasurer is usually responsible for setting the budget and keeping track of it, all the senior people in the club should have an understanding of the budget.
Your club will be liable for tax, and it’s absolutely essential to understand what you are responsible for. The taxes you need to pay will depend on your club’s structure and type of organisation. For example, businesses like sports clubs need to pay National Non-Domestic Rates (NNDR) or Business Rates on their property, and a limited company may need to pay corporation tax.
If your club generates income through memberships or by selling food, drink or souvenirs or renting/selling land, or you have paid employees, you may also need to pay tax in these areas. Also, if you are VAT registered you will need to take this into consideration in all your transactions, although some may be exempt.
On the other hand, you may be entitled to tax relief in some areas. Tax is always a complex area, and so it’s always advisable to seek advice from HMRC and/or an accountant or financial adviser.
The more sustainable your income, the more likely your football club is to succeed. Sustainable income can come from a variety of sources. A few of the most popular you may want to consider include:
Membership fees and subscriptions which cover the daily running of the club. Any extra income can then be saved or invested.
Finding a company to sponsor your club is a great way to cover costs. They could fund kit, equipment, or even provide staff to work voluntarily.
Fundraising events for the club, which involve local businesses and the community can both boost income and encourage greater engagement with the club’s activities.
Commercial activities can include selling refreshments or kit to fans or even hiring out your facilities for private events.
Grant funding is sometimes available to sports clubs which are developing their facilities or launching a new project.
Offer community shares to supporters and members, supporters which can be withdrawn plus a small amount of interest on investment (at your discretion).