As a financial professional, the first day of every month is pretty crazy. This is because the last month’s bank statement is most likely available for me to start working on my month end closing activities. My day is spent completing bank reconciliations, auditing transactions and drafting financial statements.
Now, you might be wondering why I want to talk to you about the 3rd week of the month.
Because it's the best week to plan your nonprofit board meetings from a financial reporting perspective.
Here’s the deal, most nonprofits like to report activity and their financial position based on the close of the last month. That day is most likely to fall in the first week of the month. In the year 2017, that will happen 10 times out of 12. So depending on what day of the week you have the meeting, your financial professional will be hard pressed to get your month closed and financials in your board’s hands on time. So what do most boards do? They either report a month in arrears (to the last reconciled month end) or use the financials as of the date they run the report and don’t give a second thought to the fact they may be incomplete, hoping to catch any additional transactions in the next month’s meeting.
You may be wondering why don’t you just hold your meeting during the 2nd week of the month. This is because if you use a consent agenda, I recommend you send your board packet out to members 4 days in advance of the meeting.
Now if you just said to yourself, what is a consent agenda, click HERE to learn more.
Certain financial reports and the last meetings minutes are typical to include in a consent agenda. Even if you aren’t using a consent agenda format, I highly recommend you still get board packets out at a minimum of 2 days in advance so your board members can come to the meeting prepared to work.
Just how effective will a board member be if they are reading the documents the moment they sit down for the meeting? And do you really want them reading financial statements and minutes during a meeting as opposed to listening and engaging in board work?
When does your board normally hold meetings? Share in the comments below!