Booster Club Accounting Best Practices

by Jim Connelly, founder of BoosterSpark

Booster club accounting best practices are essential for maintaining financial transparency, accountability, and compliance. Booster clubs are typically organized to support schools, sports teams, arts programs, or other community organizations. Here are some best practices to consider when managing the finances of a booster club:

1. Establish a Clear Financial Structure:
   • Define the club's purpose, goals, and objectives in writing.
   • Create a constitution or bylaws that outline the club's financial policies and procedures.
2. Maintain Separate Bank Accounts:
   • Open a dedicated bank account for the booster club separate from personal accounts.
   • Ensure that the account is in the name of the booster club, not an individual.
3. Two-Signature Requirement:
   • Implement a two-signature policy for all financial transactions to prevent unauthorized withdrawals or expenditures.
4. Detailed Record Keeping:
   • Keep detailed records of all income and expenses, including receipts, invoices, and bank statements.
   • Use accounting software or spreadsheets to track financial transactions.
5. Regular Financial Reports:
   • Provide regular financial reports to booster club members, including income statements and balance sheets.
   • Make financial reports available to members at meetings and online.
6. Budget Planning:
   • Develop an annual budget that outlines expected income and expenses for the year.
   • Review and update the budget as necessary.
7. Transparent Fundraising:
   • Clearly communicate the purpose of fundraising activities and how funds will be used.
   • Avoid misleading or deceptive fundraising practices.
8. Receipt Tracking:
   • Issue receipts for all donations and fundraising activities.
   • Maintain a donor database for contributions and acknowledgments.
9. Expense Approval Process:
   • Establish a clear process for approving expenses, including who can authorize payments and what documentation is required.
10. Reimbursement Policies:
    • Define reimbursement policies for volunteers and members, including what expenses are eligible and how to submit reimbursement requests.
11. Compliance with Tax Regulations:
    • Familiarize yourself with local and federal tax regulations applicable to nonprofit organizations or booster clubs.
    • Obtain tax-exempt status if eligible.
12. Internal Controls:
    • Implement internal controls to prevent fraud, such as regular financial audits and segregation of duties.
    • Conduct periodic reviews of financial records by an independent committee.
13. Membership Engagement:
    • Encourage active participation and transparency among booster club members.
    • Hold regular meetings to discuss financial matters and club activities.
14. Insurance Coverage:
    • Consider obtaining insurance coverage, such as liability insurance, to protect the booster club and its members from potential risks.
15. Seek Professional Advice:
    • Consult with a certified public accountant (CPA) or attorney experienced in nonprofit and booster club regulations to ensure compliance.
16. Documentation Retention:
    • Retain financial records and documents for the required number of years as per legal and regulatory requirements.

Remember that booster club accounting can vary by location and specific circumstances, so it's essential to adapt these best practices to the unique needs and legal requirements of your club. Regularly review and update your financial policies and procedures to ensure they remain relevant and effective.