Bank Accounts

All Friends of Library groups need to control their cash.  They should be able to make deposits and pay bills easily and keep their funds safe.  So how do we go about setting up our banking?  Read along for some ideas and notes that can make your efforts easier.

Type of Account
Banking products have changed over the last several years.  Being a 501(c)(3) non-stock corporation, means that you may qualify for 'special checking account' than what is available for regular businesses.  The account needs to be able to accept large amounts of cash deposits (you know those book sales), be able to accept deposits with many checks (you know those membership renewals) before incurring service charges.  Verify the minimum balances that are required, and make sure if you have another account, that all the accounts are linked together so that all your balances are counted for the minimum balance.

Number of Accounts
Each group is different and depends on the type of fund raising your group is involved in.  I would say at a minimum, a checking account and some type of savings/money market.  Both of these accounts should be with a bank with FDIC insurance and the combined balances should be below the allowed balance.  You can estimate the amount of coverage at the FDIC EDIE Estimator.  It is a great little tool. 

You may consider having an account that you use for on-line banking, such as a PayPal Account or one that is used for your on-line payments from book sales.  If there is such an account, the Treasurer should prepare proceedures and review these procedures with those involved so that all the information can be recorded in the groups financial records.

Signatures on the Account
Generally there should be at least two signers on the account.  First being the Treasurer, second could be the President, Vice President and or Secretary and even then, there may be the need to have a third and fourth name on the account.  This can become cumbersome with the stricker banking regulations.  Generally all signers need to be at the bank at the same time to sign on the account.  Keep in mind, have more than two signatures may help when the individuals are away on vacation or out of town. 

Next would be to determine how many signatures would be required to negoitate a check.  Some Friends groups feel that every check needs two signatures.  I would suggest - that depends on your group.  It is my feeling, that checks over a certain reasonable dollar amount should require two signatures.  However you decide, your check stock should say that the check is only good with two signatures over a $XXX amount.

Electronic Transfers and Electronic Services
Having the ability to move funds from one account at the bank to another, example from checking to the money market is a great help in managing the funds of your organization.  Being able to view your account on-line is a great convenience along with obtaining a copy of your bank account statements.  If electronic services are set up, be sure to write down the passwords and keep them in your Treasurer's Handbook.

Night Deposit Box
I spoke about this at a seminar recently.  Having a key to the night deposit box is quite important to your group.  Having a member take home cash to keep overnight is not a great business practice.  It puts the organization at risk and it puts your member at risk.  Most likely this risk is not insured.  Therefore if there was a loss, the organization would lose their hard earned donations and revenues, let alone how your member would feel.  Everyone would sleep much better if you make a deposit at the end of your event!

Blank Check and Deposit Stock
So what do you do with the that big box of  blank checks and deposit tickets?  This is a prime example of having a file drawer at your library for the use of the Friends that is under lock and key.  Keep what you need on hand, and when your supply gets low, replenish the supply.

If you are using computer checks, having an old fashion checkbook with manual checks is another great convenience.  I've used a wallet size.  It works well when you need to write out checks at events or when the other signers will be taking care of business while you are away.  I recommend that the checks have carbon copies that way you can have a copy when you get back and the signer won't have to keep lots of records in your absense.

Meet with your Banker
Depending on your group, you may wish to invite your Banker to your Finance Committee meeting.  Again, possibly on an annual basis, give a call or stop by and see if there are any new products that the bank is offereing that can make your organization run smoother.

Policy/ Board Minute Update
Once you have your banking in order and have decided on the number of accounts, the banking institution, limits and signatories, etc., I strongly suggest that this information be read into the group's minutes on an annual basis.  Of course, if there are changes during the year, make sure that those changes are read in also.

If you open accounts and close accounts - that action should be approved in advance by the Friends Board of Directors and be in their minutes.

Conclusion
Once you have your banking organized, you will be sitting just fine in keeping your organization's finances in order.