Finance Operations v1.5

Finance Operations

imperialcollegeunion.org/trainingimperialcollegeunion.org

Finance Operations

Finance Operationsimperialcollegeunion.org/training

Contents

Contents 2

Introduction 3

Warnings & Advice 4

Value Added Tax (VAT) 5

Getting Money into your Accounts 14

Getting Money out of your Accounts 22

Miscellany & A Summary 30

Frequently Asked Questions 31

Appendix 1 – Union Financial Regulations 34

Appendix 2 – Transaction Codes 41

Appendix 3 – Management Group Contacts 42

Version 1.5 - 05 February 2011

Finance Operations

imperialcollegeunion.org/training

Introduction

The Purpose of this Booklet

This booklet provides the details to the Union’s finance regulations and operational procedures – it outlines what you need to do to actually make things happen. It outlines what you need to know about Value Added Tax (VAT) and the associated paperwork which is required, how to get money into your accounts, and importantly how you can get money out of your accounts.

The full Union Finance Regulations are reproduced in Appendix 1 to this booklet. Information about the overview of the system, and how to obtain live finance information are contained within the Finance Overview booklet and accompany ing training. This is considered necessary pre-reading before using this booklet.

Who this Booklet is for

This booklet is primarily aimed at Treasurers of Clubs, Societies & Projects, while the Finance Overview booklet is primarily intended for both Chairs and Treasurers. Depending on the nature of your activities, you will have varying degrees of interaction with the Union regarding finances.

More Infomation & Finance Office Hours

Clubs & Societies Finance Officer office

Ravi PallDeputy President (Finance & Services)E: [email protected]: 020 7594 8060, extension: 58062

Aziz BilgramiClubs & Societies Finance OfficerE: [email protected]: 020 7594 1514, extension: 41514

hours are 4pm-5.30pm in the Student Activities Centre each day.


Warnings & Advice

As a Chair or Treasurer of a Club, Society or Project you have been elected into a position of trust, a position which also holds a formal Financial Responsibility for the financial activities of your group for the forthcoming year.

You should always act honestly and within the rules when dealing with financial transactions. Many of the concepts may well be alien when you first start the role, however support and advice is available. You must not seek personal financial advantage from your position – always seek out the best deals which are in the interests of your members.

Your first point of call for support and advice should be your Managemenrt Group Treasurer, details of these students are available in Appendix 3. Please remember that the people holding these roles are volunteer students, so please do not expect instant responses.

If you think something is wrong with the items posted on your online transaction pages you should contact the Clubs & Societies Finance Officer as soon as possible. The longer you leave queries the harder they become to resolve.

The rules and procedures contained within this booklet and the Finance Overview booklet support the Union’s Finance Regulations, available in

Appendix 1. Failure to comply with these regulations and procedures may lead to disciplinary action. A result of disciplinary action may be logged on your permanent college record, which may include a hearing on fitness to practice. This may affect your future job prospects – so think about your actions.

Finance Operations


It is critical that you understand Value Added Tax (VAT) and the implications it has upon the operations of your Club, Society or Project. Not accounting for VAT correctly can be very detrimental to your Club, Society or Project.

Background

Value Added Tax (VAT) is a tax charged on most goods or services sold within the UK, imported into the UK or acquired from the EU.

The Union is a VAT registered organisation, this includes the activities of Clubs, Societies & Projects. When any part of the Union sells a product to a consumer (for example your Club, Society or Project members), it must charge the appropriate amount of VAT, known as Output Tax, which is paid to the Her Majesty’s Revenue and Customs (HMRC) – essentially the UK Government. When the Union purchases goods or services from another VAT registered organisation, it pays VAT on those purchases, known as Input Tax. This is recoverable from the HMRC provided you retain a VAT receipt or invoice.

As a VAT-registered organisation, the Union submits returns to HMRC every three months which calculate the balance between Input Tax and Output Tax, and the balance is paid or recovered.

Gross & Net Amounts

The price displayed on products in all high street shops in the UK, includes VAT. This is known as the gross amount. The net amount is price excluding VAT. The relationship is demonstrated in the example below:

Net £100 (Gross/1.2)

VAT @20% £20.00 (Gross - Net)

Gross £120.00 (Net x 1.2)

All financial information provided to you contains the net amounts, excluding the VAT.

Rates of VAT

Different rates of VAT apply to different types of product. There are three main rates of VAT and there are also products which are exempt altogether.

Standard Rate – Currently 20 per cent

You will be most familiar with Standard Rated VAT which applies to the vast majority of goods and services. It is the default rate which applies if no other rate is stated.

Reduced Rate - Currently 5 per cent

Reduced Rate VAT is less common. It applies to a few items such as children’s car seats and women’s sanitary products.

Value Added Tax (VAT)


Zero Rate – Currently 0 per cent

You are more likely to encounter Zero Rated VAT in your year as a Union Officer. Zero rated items include essential foods, public transport and printed materials.

Exempt

Some goods and services are exempt from the VAT regime; however this is not a VAT rate. Remember, no VAT has been charged, hence you cannot claim any VAT back. Examples of VAT exempt goods and services include insurance, educational training and fund raising events held by charities. The rate of VAT which is being charged will generally be indicated on any receipt or invoice you receive from a supplier. Remember: VAT rates can change with little notice, the

rates here were correct at the time of going to print.

VAT Documentation

In order to recover VAT on our expenditure we must have evidence that VAT was paid in the first place. This usually exists in the form of a VAT invoice or receipt. For an amount less than £250, it must contain:• Name, address and VAT registration

number of supplier.• Date of supply.• VAT registration number of the supplier.• Description of goods/services

purchased.• Total, including VAT amount and VAT

rate.

If the receipt or invoice is over £250 it must also have the following:• Customer address registered as

Imperial College Union, Prince Consort Road, London, SW7 2BB.

• Invoice number and date.• For each description of a good or service;• VAT rate, ex-VAT cost, unit price,

quantity, total ex-VAT cost.• Total VAT Amount.• Cash discount (if any).• Invoice total, including VAT.

An example of a typical VAT Invoice from a company can be seen on the next page; the various items required are indicated.

Value Added Tax (VAT) cont...

Finance Operations



Some companies do not produce VAT receipts automatically from their tills. Supermarkets are a common example of this. Below is a copy of a supermarket VAT receipt obtained from the customer services desk. This is where you may need to go to get one. Remember to pay special attention to the calculations on handwritten receipts such as this to ensure they are correct. Note the miscalculation on this particular receipt, circled in red.


Finance Operations


Recovering VAT

Recovering VAT is very important, as it is money that your Club, Society or Project will be saving and can add up toa considerable amount over the course of a year. Essentially it is simply a case of collecting receipts with the correct information on. Without a valid VAT Invoice the gross amount will becharged to your Club, Society or Project account instead of the net amount. You may encounter difficulty when trying to obtain VAT Invoices, as not all shops will automatically provide one. The person buying the goods will often have to ask for one specifically. By Law all VAT registered companies must provide a VAT invoice/receipt when requested.

Income and VAT

As a VAT registered organisation, the Union must pay VAT on the majority

of its income, which includes income taken by Clubs, Societies & Projects. On most goods and services you have to remember that the standard rate of VAT must be added on when you are calculating the price of the product or service you are offering. Additionally, remember that prices advertised to members must be the gross price, inclusive of VAT.

Membership

All membership fees are standard rated, except for sporting clubs. This is sport as defined by the HMRC, not whether you think your activity is sport. The Union has an agreement with HMRC whereby we pay a special rate of VAT, currently set at 5% on sporting club memberships. As all Club, Society & Project memberships must be purchased online via imperialcollegeunion.org, all the VAT calculations are made automatically.


To find out if your Club, Society or Project is defined as a sporting club, please contact the Clubs & Societies Finance Officer.

VAT Exempt Income

Some income is exempt from VAT. Income directly derived from sporting related activities, such as match fees, are exempt from VAT. However, it must be directly related to the playing of the sport, so the sale of kit to members is standard rated unless it is solely used for playing matches.

Income gained from fund-raising events is also exempt from VAT. However, please contact the Deputy President (Finance & Services) for more information before you begin planning any activity

that you believe may be VAT exempt.

Remember, for any event or activity where the income is VAT exempt, the expenditure is also VAT exempt. Fundraising events should be allocated their own Activity Code to isolate them within your Transaction Pages.

VAT Zero Rated Income

Any income from the sale of zero-rated goods or services such as newsletters and brochures is zero rated for VAT. It is important to note the difference between VAT exempt income and income which is zero rated. If zero rated, the VAT on the Input Tax can be reclaimed.

Outside Scope

Some income may be declared as


Finance Operations


outside the scope of the VAT system. If you believe you have income of this nature (which is very rare) then please contact the Clubs & Societies Finance Officer for advice.

VAT Codes for income

In addition to providing a transaction code for each item of income going into your accounts you will also be required to associate a VAT code to that income, to determine which amounts are standard rated, zero rated or exempt. The VAT codes for income are: S1 Standard rated S0 Zero rated SE Exempt SN Outside scope

Donations and Sponsorship

Clubs, Societies & Projects may receive sponsorship from external organisations to help meet the costs of an activity or event. This will be in return for some benefit to the sponsor, e.g. their logo in an event programme or on a sports kit. This benefit is classed as a service therefore the income received in exchange for that service attracts VAT at the standard rate (see the section on VAT). Before you negotiate a sponsorship deal, you should attend the training session on Sponsorship and contact the Deputy President (Finance & Services) with details of the proposal.

A donation is defined as a goodwill

gesture with no benefit returned to the donor. Donations do not attract VAT. If your Club, Society or Project receives a donation, you are required to provide a letter from the donor stating clearly the money received is a donation. If no such letter is provided, the income has to be treated as general income and will attract VAT at the standard rate.

Expenditure and VAT

Recalling, the Union is able to recovera large proportion of the VAT it pays as a result of purchasing goods or services. However, this is only possible when the correct documentation is supplied when making claims and paying invoices.

If you are buying goods or services from


a VAT registered supplier, they may request payment before the goods or services are delivered. They will produce a pro-forma invoice which is not a valid VAT receipt. This means that after your payment you must obtain a VAT receipt after delivery – this may not happen automatically, you are likely to need to chase them for this paperwork.

Please refer to the chapter on Getting Money Out of your Accounts for more information on how to pay pro-forma invoices.

VAT Exempt Expenditure

As with income, any expenditure directly derived from sporting related activities, such the hire of facilities and the purchase of kits and equipment for match purposes, is exempt from VAT.

Expenditure connected to fund-raising events is also exempt from VAT. However, please contact the Deputy President (Finance & Services) for more information before you begin planning any activity that you believe may be VAT exempt.

Remember, for any event or activity where the expenditure is VAT exempt, the income is also VAT exempt. Fundraising events should be allocated their own Activity Code to isolate them within your Transaction Pages.


VAT Zero Rated Expenditure

Any expenditure relating to zero-rated goods or services such as newsletters and brochures is zero rated for VAT. It is important to note the difference between VAT exempt expenditure and expenditure which is zero rated. If zero rated, the VAT on the Output Tax can be reclaimed.

Outside Scope

Some expenditure may be declared as outside the scope of the VAT system. If you believe you have expenditure of this nature (which is very rare) then please contact the Clubs & Societies Finance Officer for advice.

VAT Codes for expenditure

In addition to providing a transaction code for each item of expenditure going into your accounts you will also be required to associate a VAT code to that income, to determine which amounts are standard rated, zero rated, and exempt. The VAT codes for expenditure are: P1 Standard rated P0 Zero rated PE Exempt PN Outside scope

What happens when you don’t get it right?

If you held a dinner for 100 people, which cost your Club, Society or Project £10 per head (including VAT), then you charged each attendee £11 for a ticket to the dinner, you assume it would make £100 profit, right? Wrong. As a VAT-registered

Finance Operations


Things to remember about VAT

• The Union (including it’s Clubs, Societies & Projects) is a VAT-registered organisation.

• The Union can reclaim VAT providing it has the correct receipts• Most goods and services are subject to the standard rate of VAT, currently 20%.• Gross is including VAT. • Net is excluding VAT.• VAT has to be charged on most income, such as ticket sales.• All prices advertised must be inclusive of VAT.

Expenditure Quantity Gross VAT NetMeal @ £10 per head(inclusive, standard rated) 100 £1,000.00 £166.67 £833.33

Income Quantity Gross VAT NetMeal @ £11 per head(inclusive, standard rated) 100 £1,100.00 £183.33 £916.67

Profit/(Loss) £83.34

Expenditure Quantity Gross VAT NetMeal @ £10 per head(inclusive, standard rated) 100 £1,000.00 £0.00 £1000.00

Income Quantity Gross VAT NetMeal @ £11 per head(inclusive, standard rated) 100 £1,100.00 £183.33 £916.67

Profit/(Loss) (£83.33)

If, however, you failed to obtain a VAT Invoice for the meal, the bottom line would look a lot bleaker

organisation the Union has to pay VAT on ticket income, so instead of £1100, only £916.67 will end up in your account; the remaining £183.33 belongs to HMRC. The resulting picture would look like:


Getting Money into your Accounts

Take Payments Online

Every Club, Society or Project is able to set up products in the online shop section of the Union’s main website, imperialcollegeunion.org. Details of how to do this can be found in the training on workbench, which is compulsory for all Treasurers.

Setting up items in the online shop is the preferred method of taking payments. It is simple for the person paying as they receive an automatic receipt from the system. More importantly it is much easier for Club, Society or Project Treasurers – the system automatically generates lists of who has purchased which products, maximum numbers can be applied to avoid overselling, the potential for losing large amounts of money which doesn’t

belong to you is avoided, and the money appears directly in your Club, Society or Project’s accounts within 96 hours of someone paying, making it very quickly available for you to spend. Taking payments for any membership fees must be done online.

To reiterate, it is strongly recommended and expected that all payments are taken online.

Income from online sales will appear in your online transaction pages in batches relating to items which have been coded to the same transaction code, sold over the space of a few days.

For example, in the figure below this club has coded products they are selling online to the transaction code 520-012-00-1, for the sale of branded kit.

The money from the online sales for a variety of kit items appear on the lines which say online sales. In the description line there is an indication of the dates between which the sales were made. Please note that revenue from more than one product can appear within the same transaction code.

Finance Operations


Taking Money to the Bank

Occasionally you may be required to take payments in the form of cash or cheques directly to the bank. As a Chair or Treasurer, you should become familiar with the Union’s procedure for dealing with Income in the form of cash and cheques, which can be summarised in the following three stages:1. Collect: Receive the money from the

individual, and issue a receipt.2. Bank: Pay-in the money at any

NatWest branch using the triplicate paying-in book which has been issued to your Club, Society or Project.

3. Report: Complete an Income Form, attach the duplicate slip and hand it in at the Student Activities Centre.

All cheques must be payable to Imperial College Union, and all cash and cheques must be paid into the Union’s bank account.

Collection of Income

In most cases the Club, Society or Project Treasurer will receive the income from individual members. It is essential that a permanent record of the transactionis made at the time of the sale. The best way to do this is to use a pre-numbered duplicate receipt book, and when issued the receipt should contain:• From whom (the individual).• For what (itemised).• When (the date).• By whom (e.g. the Treasurer).• How paid (cash, cheque).• Cheque number (if applicable).

It is important that the receipt is itemised, list every item at its individual price, so that the VAT can becalculated correctly.


Accepting Cheques

All cheques must be made payable to Imperial College Union. You must only accept personal cheques on behalf of the Club, Society or Project if they are supported by a valid cheque guarantee card. A guarantee is only valid if:• The cheque does not exceed the

amount shown on the card (usually £50 though occasionally £100).

• The card has not expired.• The signature on the cheque is the

same as that on the card. You also need to record the following on the back of the cheque:

• Card number (the long one on the front, not the account number).

• Card expiry date.• Amount guaranteed by the card.• Club/activity name or code (for tracing

bounced cheques).

Any cash or cheques that have been collected must be stored securely until they are paid into the bank. Do not take anything home with you if you can avoid it. Remember, you are financially responsible for the Club, Society or Project’s money. Should you lose it you will have to replace it.

During office hours, you can store money in a safe in the Union. Outside these hours, we can arrange for you to use the Bar Safe. Contact the Clubs & Societies Finance Officer in advance if you wish to utilise this facility.

Paying-in Income

The Union has one bank account (with NatWest) for all Clubs, Societies & Projects. All income from Clubs, Societies & Projects must be paid into this account. Due to the large number of groups, the following procedure must be followed or mistakes are likely to occur.

Each Club, Society or Project will have a NatWest Paying-In Book. This should have been handed over by last year’s committee. If you do not have one, a replacement can be obtained from the Student Activities Centre.

These are triplicate Paying-In Books and come with carbon paper to be placed between the slips when you write them, to create a further two copies. If you are paying in cheques, remember to record the details of the cheque on the back of the Paying-In Slip so that the Clubs & Societies Finance Officer can trace any cheques that bounce. You should record the name on the cheque, the amount, the date it was written and the cheque number.

Getting Money into your Accounts cont...

Finance Operations


The paying-in slip should be completed as follows:

Once you have completed the Paying-In Slip, you can then pay-in the money at any branch of NatWest, it is recommended to use the NatWest branch in the Sherfield Building on the South Kensington campus. The cashier will stamp each of the three slips, tear off the first copy and hand you the book back. Do not use the quick deposit box as the book must be stamped.

The duplicate slip must be attached to a completed Income Form and then be handed in behind the desk in Student Activities Centre. The triplicate copy is for the Club, Society or Project’s records and should be kept in the Paying-In Book.

In order for the income to appear correctly on your Club, Society or Project’s transaction pages there are two

things you ensure you do:

• You must complete a yellow Paying-In Form with the details of the money you have paid into the bank and what it is for.

• The duplicate Paying-In Slip from your Paying-In Book must be attached to the yellow Paying-In Form and handed in at desk at the Student Activities Centre. Remember that you can post things to the Student Activities Centre or put items in the internal mail.

Once you have completed these two operations the net amount (i.e. not including the VAT) will then be credited to your accounts and appear on your online transaction pages.


A summary of the paying into the bank process is shown in this diagram:

Club Member

C ash o r cheque

Chair or Treasurer

G oods o r se rv ices R ece ip t

NatWest

Complete paying-in sl ip

Send duplicate paying-in sl ip to

Student Activit ies Centre

C&S Finance Officer

Web Accounts https://eActivities.union.ic.ac.uk/

Complete paying-in form on eActivit ies

Send invoices

Money can also be generated through the sale of goods or services and sponsorship. If you are supplying goodsor services, you will need to produce a Union Invoice.

Invoices cannot be issued without a supporting document such as a Purchase Order, written request or a signed contract from a person entitled to act for the customer assuring us that they will pay the invoice.

The supporting document ensures that there is sufficient proof of intent to pay; if this proof does not exist you must receive payment BEFORE the goods

or services are provided.

Invoices automatically allow 30 days for payment. Until an invoice is paid the money will not appear in your accounts. It is the responsibility of the Club, Society or Project to ensure that the invoice is paid.

Never make up your own invoices, always make sure you create an official Union one. An example of a Union invoice is shown on the next page.


Finance Operations


imperialcollegeunion.org

Invoice Imperial College UnionBeit Quadrangle

Prince Consort RoadLondon, SW7 2BB

Tel: 020 7594 8069Fax: 020 7594 8065

VAT Reg No. GB 240 5617 84

To

Invoice Number Date

Our Reference Your Reference

Bank Details for Bank Transfer:Name: National Westminster plc.Branch: South Kensington Station

Account No: 00618136 / 00618152

Sort Code: 51-50-01

Description £Price/UnitQuantity

Net Total

VAT@ %

Amount Due

Please make cheques payable to Imperial College Union

Terms of payment: within 30 days of invoice date.

Address

Organisation

Attention of

Ordered By Issued By

Z

To get an invoice you must see the Clubs & Societies Finance Officer after 4pm, together with the supporting documents. All invoices are handwritten in triplicate – you will need to do this once you have obtained an invoice. The white copy you will need to send to the customer and the pink copy is retained for your records. The green copy of the invoice will be retained by the Union for its records; however it is your responsibility to chase the company for payment.


Internal Invoicing

If you have supplied goods or services to another part of the Union and require payment, you must not issue an Invoice. This is because transfers within Clubs, Societies & Projects, Trading, or any other part) will not incur any VAT and so we must ensure we do not charge VAT on any such transfer.

Club

CSC/FU

Net Amount NotesF F

-

-

-

-

-

-

Club

CSC/FU

Net Amount NotesF F

-

-

-

-

-

-

Segments:

Acc - Analysis Code - eg 895 for Travel

Club - Club Code - eg 001 for ACC Football

Act - Activity Code - eg 00 for day to day activites

F - Funding Code - eg 0 for Union Grant, 1 for SGI CSC/FU

DPFS

Club Act

Authorised: Date:

Acc Club Act Acc

Club HJT

Acc Club Act

From To

Imperial College Union - Internal Charging Form

Imperial College Union - Internal Charging Form

From To

Authorised: Date:

Acc Club Act

Segments:

Acc - Analysis Code - eg 895 for Travel

Club - Club Code - eg 001 for ACC Football

Act - Activity Code - eg 00 for day to day activites

F - Funding Code - eg 0 for Union Grant, 1 for SGI

Club HJT

DPFS

CSC/FU

For internal charging, you must use a blue Internal Charging Form, which can be found in the Student Activities Centre or from imperialcollegeunion.org/forms. You should write out this form and hand it to your Management Group Treasurer who will approve it and hand it in for processing. An example of how to fill in the form is given below:


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Other Sources of Income

Sale of Club Equipment

Assets (equipment) belonging to Clubs, Societies or Projects are the property of the Union. Before you sell, lend or dispose of any of this equipment you must first obtain permission from the Deputy President (Finance & Services).

Events

For more information on the financial aspects of events, take a look at the booklet on event budgeting.

College Funds

It is possible to obtain grants for your Club, Society or Project from a number of College funds. There are two funds which are strong supporters ofthe Union and its Clubs, Societies or Projects.

The Harlington Grants Committee has been accumulated from money received from gravel extraction at Harlington Sports Grounds. The grants from the Harlington Trust are awarded to Clubs, Societies & Projects to support an type of activities, not just sport. The committee helps finance new or improved facilities and equipment but will not meet the running costs of the Club, Society or Project. Additionally, it will not support tours. Each year the trust awards approximately £30,000.

The Imperial College Trust is a registered charity which partly fulfils its objectives of acting for the benefit of the College through the support of students and activities that would not otherwisereceive funding. The Trust provides a grant to the Exploration Board and a large contribution to the Union’s tour funding. Also in the past it has supporteddramatic productions, equipment, tours, events and activities.


Before you consider spending any of your Club, Society or Project’s money, there are two things you should check:1. Does your Club, Society or Project

have the necessary funds?2. Are you authorised to spend that

much?

You can check if you have the necessary funds by looking at your online transaction pages.

In order to maintain some degree of control on how much we spend, there are limits on the amount an Officer can authorise. A Club, Society or Project Chair or Treasurer can approve up to £200 and anything over this amount has to be approved by a Management Group Chair or Treasurer, together with a Deputy President for items over £1000. With increasing responsibility, there is anincrease in the limit of authority (see the diagram at the bottom of this page).

Expenditure under £200

Reimbursement – Cheques

When the amount is under £200 it is permitted for someone to use personal expenditure (i.e. your debit card or cash) to pay for a Club, Society or Project spend. Once the individual has spent their money it is important they obtain a VAT receipt and complete a claim form as soon as possible.

The Claim Form is made out to the Club, Society or Project member, authorised by the Club, Society or Project Treasurer and passed to the Management Group Treasurer. The Management Group Treasurer will ensure a cheque is then raised for the individual. Please note it can take up to two weeks to raise a cheque.

The Club, Society or Project Treasurer then needs to make sure that the cheque reaches the individual who originally made the payment. It is crucial this happens swiftly as someone is owed this money.

Getting Money Out of your Accounts

Club, Society or Project Chair or TreasurerManagement Group Chair or Treasurer

Deputy President Executive Committee

Trustee Board

£0£200£1,000£50,000£500,000

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Generally the Union has around a six-figure sum on it’s accounts relating to cheques which have been issued to individual students, are less than £200, but which have never been taken to the bank. Items for which the cheques have not been issued are shown on the online transaction pages in yellow, for example:

It is important that Treasurers chase individuals who have not taken their cheques to the bank to do so; cheques will expire after six months.

If cheques which have been issued have been lost or accidently destroyed then you should contact the Clubs & Societies Finance Officer to arrange for a replacement to be issued.

Reimbursement – Petty Cash

Personal expenditure below £20 can be reimbursed swiftly using a Petty Cash Form, which can be obtained from the Student Activities Centre. This method is preferred to writing cheques for small amounts because it costs the Union money to issue cheques. The image below provides details on how to fill out a petty cash voucher:


Expenditure over £200

Purchase Orders

The ideal way of paying for items over £200 is by agreeing credit terms with the company you are purchasing from. Prior to placing an order you should obtain a quote from the supplier and then complete a Union Purchase Order.

A Purchase Order is a document issued by the buyer, in this case the Union, which dictates the type, quantity and agreed price for goods or services required. It contains a unique Purchase Order Number, delivery instructions, required delivery date and terms ofpayment. Purchase Orders require approval in line with the approval chart above.

Acceptance of the Purchase Order is an agreement which ensures that the company will not demand payment for any extra goods or services that wereoutside the original specification. Once you have placed an order, be sure to pay the supplier within the agreed time limit.

Please note that when booking rooms within College that incur hire charges or booking fees, Purchase Order Numbers will be required by College’s Conference Office.

The process for raising a purchase order is currently being changed, with

an online portal developed. Full details of the new processes will be available around Summer 2011. In the mean time, Purchase Orders can be obtained by speaking to the Clubs & Societies Finance Officer.

Invoices & Pro-Forma Invoices

There are circumstances where a company will demand payment for goods or services before they are delivered. The company will then issue what is known as a Pro-Forma Invoice; this can be used to support a Claim Form and a cheque to the company can be issued. After the goods or services have been delivered, you should receive a VAT Invoice.

Although this is not a demand for payment, it is important that this invoice is delivered to the Clubs & Societies Finance Officer, otherwise your Club, Society or Project will be charged the gross amount on the invoice. If the supplier is willing to provide the goods on credit then you will not need to obtain a Pro-Forma, instead they will send a VAT Invoice with the goods. The VAT Invoice can then be used to raise a cheque in the same way a Pro-Forma can.

Getting Money Out of your Accounts...

Finance Operations


Payment Methods

There are a number of ways in which actual payments can be made to companies and individuals.

Cheque

By far the most common method of payment is by cheque. Each Management Group has a cheque book which is held by the Clubs & Societies Finance Officer and it is up to the Management Group Treasurer to write out these cheques and get them signed by their Honorary Senior Treasurer. This process can be lengthy which means it may take up to two weeks to process a claim, so don’t leave it to the last minute!

All claim forms with supporting documentation must be handed to your Management Group Treasurer – they will then contact you when the cheques are ready.

Union Credit Card

The Union also has a corporate credit card which can only be used when no other method is appropriate. Reasonsto use the Union credit card include purchasing products online or when payment is needed rapidly.

If you require the use of the Union credit card you must complete a credit

card purchase form which outlines the payment(s) to be made, and ensures the correct approval process. Purchases made via the Credit Card have to go through the same approval process as any claim – your Management Group Treasurer can help you with this. Once you have completed the approval form, available online at imperialcollegeunion.org/forms, you must make an appointment with the Union’s Head of Finance to obtain the card and make the payment. You should allow up to a week to go through this process.

Imprests

When goods or services must be paid for by cash in hand, it is possible to obtain an Imprest which is essentially a cash advance. Imprests may only be given to a Full Member of Imperial College Union who agrees to be held personally liable for the amount advanced. The cash advance is granted and then the receipts and any remaining cash must be returned to the Union. Imprests are often used when going on tour, where cash is required for motorway tolls or accommodation, or where foreign currency is required for group purchases.

Note that Imprests can be grantedin any currency and that the Union will receive a better exchange rate than is available on the high street. An imprest form is shown on the following page:


imperialcollegeunion.org

Clubs & SocietiesImprest FormClub CSC/FU

Club Code Expenditure Code

Purpose

Amount Advanced Cheque No Date

Advanced to

Authorised by:

Deputy President (Finance & Services) Date

CSC/Treasurer Date

I undertake to spend this imprest only for the purposes which it has been advanced and to do so in accordance with the Union Financial Regulations and Procedures.

I undertake to return unspent moneies and suitable documentation covering expenditures made by the date stated above.

I understand that I am personally liable to Imperial College Union for this money and that the Union make take whatever steps it deems necessary to recover non-returned money or undocumented expediture from me.

I confirm that I will be a full member of Imperial College Union until at least the return date stated above.

Signed Date

Notes

Unspent Money and Documentation to be Returned by


Finance Operations


Internal Charging

Internal Transfers are a method of paying for goods or services bought within the Union. If you buy goods or services from another Club, Society or Project, or a Union outlet such as the bar it is important that you sign off this expenditure to show your authority for the payment to be taken from your accounts.

Generally this approval will be made using an Internal Charging Form available in the Student Activities Centre, and discussed in the section on getting money into your accounts. Essentially you are transferring money from one part of the Union to another, hence no VAT is payable on the transaction.

The most common item to be charged to Clubs, Societies or Projects are fees for minibus hire and fuel. They appear on your transaction pages like the one below:


Claim Forms

Correct completion of a claim form is a key element in keep the system operating and ensuring payments happen. A Claim Form must be completed for all Invoices/Receipts in order for a cheque to be issued. Fully completed Claim Forms with valid Invoices or Receipts should then be handed to the respective Management Group Treasurer.

The Management Group Treasurer will then check that the required money is available to spend in the relevant budget category and that the form has been completed properly. If all the details are correct, they will write a cheque for the payee stated on the Claim Form; they will then arrange to meet with the Honorary Senior Treasurer to get the cheque signed. This can be seen on the following page:


Finance Operations


Complete a Purchase Order Get it authorised

Will the supplier give us

credit?

Yes

No

Get delivery

Complete Claim Form

with VAT invoice

Hand to CSC/FU Cheque is raised and

signed by HST

Send cheque to suppliers

Obtain pro-forma invoice from suppliers

Complete Claim Form

with pro-forma invoice


signed by HST

Send cheque to suppliers

Get delivery

Obtain VAT invoice

and hand to C&S Finance Officer

Is the expenditure over £200?

Yes No Is someone going to pay

out of their pocket?

Pay and obtain delivery

No

Yes

Complete claim with receipt/VAT invoice


signed by HST

Give cheque to member

Ensure you have the

money or the budget to cover your spend

The complete process for expenditure is summarised in this flow chart:


Important things to remember

• Set up products in the online shop via Workbench to take payments for events and goods.

• Issue receipts for payments you accept and store the duplicates safely.

• Be wary of accepting cheques. Ensure they fulfil the criteria listed.

• Record the cheque details on the back of the paying-in slips.

• Always store money securely until it is banked.

• Never take Club, Society or Project money home with you.

• You must pay all Club, Society or Project money into the Union’s bank account.

• You must not “borrow” or pay Club, Society or Project money into your personal bank account.

Activity codes

To have an activity code created on your accounts you should contact the Clubs & Societies Finance Officer.

If you already have an Activity Code set up on your online transaction pages and would like the name changed you can contact your Management Group Treasurer.

If you feel there is a feature or piece of data analysis which would be very useful to have, either just as data or online on your transaction pages please contact the Student Activities Centre. If you are passionate about changing things for the better you could always join our eActivities users group – email the Student Activities Centre if so.

Miscellany & A Summary

Finance Operations


Frequently Asked Questions

There are a few things that get asked a lot over the course of a year. To make things quicker and esaier, the most frequently asked questions (and their answers!) are listed below. If you are unsure of what to do, and your question is not answered below, please ask before you act!

VAT:Q: How do we reclaim the VAT on goods or services we have purchased?A: Submit a valid VAT Receipt with your claim. For more information, read the sections on VAT in this manual or speak to the Clubs & Societies Finance Officer.

Q: How can we not pay the VAT on exempt income? A: Clearly describe the goods or services on the Income Form so that it can be seen that they are VAT exempt or zero rated and make sure you include the correct VAT code on the form.

Q: How can we not pay VAT on events? A: Provide full and exact details of your event in the budget you submit to the Deputy President (Finance & Services). This information can then be used to determine if your event is VAT exempt. This must be done well in advance of the event – it is not possible to ‘back-date’ the VAT requirements.

Q: How can we reclaim the VAT on goods purchased at a supermarket?A:Most till receipts are not valid VAT Receipts, you will probably need to go to the Customer Service Desk and request one, they must provide this by Law.

Income:Q: Am I allowed to take money home?A: No. The money is not yours so cannot be taken home with you, you must make arrangements for secure storage, as above.

Q: Should we go to Natwest to get a new Paying-In Book?A: No, pick one up from Student Activities Centre.


Q: Should we wait for all members to pay for an event before banking the money or should it be paid in as it is collected?A: The money should be paid in as soon as it is received.

Q: Are we allowed to pay Club, Society or Project members for travel and food from the takings?A: No. Most of your takings will be VAT liable; paying members out of these takings will be considered VAT fraud. All takings should be banked first and any expenses claimed through the normal processes.

Q: Can we pay referees/coaches/DJs from the takings or money collected from members?A: No. This would be fraudulent as above. All coaches should be on a contract and should be paid under this, not cash-in-hand. Referees and DJs may be paid cash-in-hand but this cannot be done from the takings; either

pay them yourselves and claim the money back or, if this is not possible, contact the Clubs & Societies Finance Officer in advance and ask for an Imprest to cover the costs. A receipt will always be needed from a referee or DJ regardless of if they were paid by a member and this claimed back, or paid from an Imprest.

Q: When is the deadline for submitting an Income Form after we have banked the money?A: Three working days after banking.

Q: Should Club, Society or Project members handle cash?A: This may be allowed but you will need to check with the Deputy President (Finance & Services).

Frequently Asked Questions cont...

Finance Operations


ExpenditureQ: Up to what value may a Club, Society or Project officer authorise a claim?A: £200 for the Chair or Treasurer, nil for everyone else.

Q: Should we pay for goods or services first and then claim our money back? A: This depends on the amount of expenditure. We strongly discourage members from incurring large expenses (over £200) but for less than this you can pay first and claim afterwards, just remember that it may take some time to get your money back! Any expenses over £200 should be discussed with your Management Group Chair or Treasurer beforehand.

Q: What is the minimum amount a cheque may be written for?A: £20, anything below this should be claimed via Petty Cash.

Q: What can be used to back up a Claim Form? A: Any of the following: - A receipt. - An invoice or Pro-Forma made out to “Imperial

College Union”. If payment is being requested to be made to a third-party (i.e. not the supplier named on the invoice, this may be a Club, Society or Project member who has already paid the invoice for example), the invoice must be stamped as paid. Invoices not made out to “Imperial College Union” are not acceptable.

- A duly authorised contract binding Imperial College Union (as with invoices, contracts between a supplier and a third-party are not acceptable).

Q: What cannot be used to back up a Claim Form? A: Any of the following: - Photocopies of any of the above, only original

documents will be accepted. - Credit/Debit Card slips - Bank Statements

Budget CodesQ: I don’t understand the budget coding. A: Speak to your Management Group Treasurer

Q: Is it all right not to put any codes on Claims Forms and Income Forms?A: No. If you fail to provide the correct funding codes, we will simply charge your Self Generated Income.

Club AccountsQ: Where can I find my Club, Society or Project transaction pages?A:At https://eActivities.union.ic.ac.uk/finance


Appendix 1 – Union Finance Regulations

This regulation governs all financial matters relating to the Union. Although these Regulations contain no specific sanctions for non-compliance, deliberate, negligent or repeated disregard of their provisions may result in disciplinary action being taken against the person concerned, under the terms of their employment contract with the Union, or, in the case of students, under the Union Disciplinary Procedure. Where appropriate, criminal proceedings may also be considered.

The President is ultimately responsible for the finances of the Union. The responsibility for the day-to-day administration of the finances of the Union is delegated by the President to the Deputy President (Finance and Services). Day-to-day responsibilities may be allocated by the President to suitable members of staff. The Union annual accounts shall be approved by the Trustee Board and the College Audit Committee prior to report to the College Council.

Use of Union Funds 1. The Union subvention from College, monies raised by trading outlets and

any other funds generated by Union-wide initiatives may not be used for: 1. Loans, grants or subsidies to individual students, 2. Donations or payments to persons and bodies outside the Union

except for subscriptions to national or regional student bodies approved by Council or payments for supplies and services rendered. In particular, no part of such funds shall be used to support or further the aims or activities of any body, group or campaign of a political nature, nor be paid to any voluntary body or other educational institution or any group of persons at any educational institution,

3. The benefit of individuals in any way that would not be equally available to the membership as a whole,

4. Donations to charitable causes, except where the Union authorizes fundraising events and donates the proceeds to charitable causes, provided that the object of the fundraising is made clear to the donors, or

5. Ultra vires payments as defined by the Attorney General.

Trustee Board Responsibilities 2. As established in Regulation One of the Union, the Union’s Trustee Board

Finance Operations


shall be responsible in particular for: 1. The Union’s long term objectives and strategy, 2. The Union’s operating and capital expenditure budgets and any

significant changes in them, 3. Strategic oversight of the Union’s operations (both voluntary and

commercial), including competent management, sound planning, adequate systems of internal control, adequate accounting, risk management and compliance with statutory and regulatory procedures,

4. Personnel, particularly strategic re-organizations, 5. Health and Safety, 6. Investment or borrowing of Union funds, 7. Reviewing performance in light of the Union’s strategic direction. 3. The Trustee Board shall: 1. Approve the Union’s Annual Report and accounts, 2. Approve any significant change in accounting practices, 3. Approve any major capital project and contract which is significant

strategically or by its size, and 4. Approve the remuneration of the Sabbatical Officers and Union General Manager. 4. The Trustee Board shall, as established in Union Regulation 1.33, be

responsible for approving without delegation any capital project or contract valued in excess of £1,000,000.

Budgets 5. The Executive Committee shall propose a consolidated income and

expenditure budget and a capital expenditure budget for each financial year not later than the end of the summer term in the previous year.

6. The proposed budgets shall be approved by the Trustee Board, after ratification by the Council.

7. The approved budgets (or individual items within them) may be varied only with the authorization of the President for amounts up to £10,000 and the Executive Committee for all amounts in excess of this. The President may delegate authority to vire to appropriate Officers or Committees, save that no Officer may exercise such authority in excess of the limits of authority defined in paragraphs 14 – 21 of this regulation.

8. The Executive Committee shall monitor the performance of the Union


against budget during the financial year and may review the budgets in line with forecasts.

Budget Holders’ Responsibility 9. It is the responsibility of every budget holder to ensure that expenditure

committed from his/her budget complies with the Union financial procedures. Budget holders must also ensure that the handling of income complies with the Union financial procedures.

Bank Accounts and Investments 10. Neither the Union nor any constituent part of the Union nor any individual

acting on behalf of such a part may operate a separate bank account other than that authorized in advance by the Executive Committee, in accordance with operational policy.

11. The Executive Committee shall be authorized to invest any surplus funds or reserves after taking reasonable professional advice.

Payment Authority 12. All payments (cheques and other paper/electronic financial instruments)

must be signed or otherwise authorized by the relevant Honorary Senior Treasurer.

13. All payments for amounts in excess of £1,000 shall be counter-signed by the President.

14. In the absence of the relevant Honorary Senior Treasurer, one of three nominees from the other Honorary Senior Treasurers may sign on his/her behalf.

15. In the absence of the President, one of three other nominees may sign on his/her behalf. 16. The Executive Committee shall approve the nominee signatures on

the recommendation of the Honorary Senior Treasurer and President respectively.

Limits of Authority 17. No unauthorized member or employee may sign a contract or otherwise

commit expenditure on behalf of the Union or any part thereof. 18. Expenditure up to £200 may be authorized by a Club or Society Chair

Appendix 1 cont...

Finance Operations


from their budget. In the absence of the Chair, the Treasurer of the Club or Society may authorize expenditure on his or her behalf.

19. A Faculty Union President, the Chair of a Clubs & Societies Committee or the Chair of a President’s Committee may authorize expenditure up to £1,000 from their budget. In the absence of the Chair/President, the relevant Honorary Junior Treasurer may authorize expenditure on his or her behalf.

20. Operational managers may authorize expenditure consistent with their budgets, subject to approval by the Union General Manager for orders or contracts in excess of £10,000 up to £50,000.

21. The Deputy President (Finance and Services), or, in his or her absence, one of the other Deputy Presidents, shall authorize all other expenditure up to £50,000.

22. The Executive Committee shall authorize all expenditure over £50,000 up to £500,000. 23. The Trustee Board, on the recommendation of the Executive Committee,

shall authorise all other expenditure.

Orders 24. Orders of goods or services shall only be placed using an Imperial

College Union order form or in accordance with a duly authorized contract.

Loans to Staff 25. Loans to staff must not be made without the written permission of the

Union General Manager. Arrangements for repayment of such loans must be put in place before the funds are advanced.

Long-Term Commitments 26. Only the President jointly with the Union General Manager shall sign

a contract which commits the Union to any obligation that extends beyond the current financial year. Such contracts shall only be signed with the prior written authorization of the relevant budget holder. Such authorisations shall be made within the limits set out in paragraphs 14 – 21 of this regulation.

27. Appointments of staff (except those employed on a ‘casual’ or ‘zero-


hours’ contract basis) and any variance to their contracts shall be authorized by the Honorary Senior Treasurer.

Events 28. The limits of authority as defined in paragraphs 14 – 21 of this regulation

shall be applied to the total of all expenditures relating to events organized on behalf of the Union.

29. Prior authorization shall be given in writing. 30. The prior written approval of the Union General Manager shall be sought

for events where the total of all expenditure exceeds £2,000.

Cash Holding 31. Other than trading outlets for legitimate operational purposes (as

determined by the Executive Committee), no constituent part of the Union may hold cash without the prior written authorisation of the Deputy President (Finance and Services).

32. Cash takings shall be deposited with the Union’s bankers within three working days of receipt and no expenditure may be incurred from cash receipts.

33. Members and employees may carry or hold cash or other valuables with due regard to the limits set from time to time by the Union’s insurers.

Borrowing 34. The Union shall not borrow any external funds without the prior written

authorisation of the Trustee Board. Guarantees and Indemnities 35. The Union shall not give any guarantees or indemnities without the prior

written authorization of the Trustee Board.

Supplies on Credit 36. Goods and services may be issued on credit in accordance with approval

procedures and credit limits set by operational policy.

Inventories and Asset Management 37. The Union shall maintain a full inventory of all its assets valued

(individually or in aggregate) in excess of £200.

Appendix 1 cont...

Finance Operations


38. It is the responsibility of all Union Officers, Club or Society Chairs and Managers to ensure that they maintain a register of such items and inform the Union General Manager when such items are purchased or disposed of.

39. Equipment valued in excess of £200 belonging to the Union or any constituent part thereof, shall not be sold, re-allocated or otherwise disposed of without the prior written authorization of the relevant budget holder and the President. Authorization shall only be granted after consultation with the Union General Manager by the President.

Union Honorary Senior Treasurer 40. The appointment of the Union Honorary Senior Treasurer shall be

determined by the Trustee Board on the advice of the Executive Committee and approved by the Rector or his or her nominee and he or she shall:

1. Act as a payment authority for the main Union bank accounts and be empowered to act on behalf of the other Honorary Senior Treasurers in their absence,

2. Ensure, on behalf of the College, that the Union Financial regulations are observed,

3. Be a Permanent Observer of the Trustee Board, Council and Executive Committee,

4. Ensure that all books and financial records pertaining to the Union are submitted to the Clerk to the College Council within 45 days of the end of the financial year,

5. Be responsible for ensuring that any anomaly or discrepancy in the financial management of the Union is reported to the Deputy President (Finance and Services). If no satisfactory outcome results, the matter shall be reported to the President, and, if appropriate, to the College Internal Audit section and the Rector.

6. Exercise office for a maximum of five years.

Committee and Faculty Union Honorary Senior Treasurers 41. The appointment of an Honorary Senior Treasurer shall be determined

by the Council on the advice of the relevant Faculty Union or Committee President or Chair and he or she shall:


1. Act as payment authority to the relevant bank account, 2. Oversee all expenditure and bring any possible anomalies or discrepancies

in the financial management of that Faculty Union or Committee to the attention of the relevant President or Chair and the Union Honorary Senior Treasurer, and

3. Ensure that all books and financial records pertaining to the relevant account are submitted to the Union General Manager within 15 days of the end of the financial year.

Finance Operations


Event CodesCode Name Description00 General Day-to-day transactions.21-29 Tour For example, Winter Tour.51-69 Event For example, Freshers Ball.

Funding Codes

Consolidation CodesCode Name Description0 External Outside College and the Union1 College Outside the Union, within College2 Internal Within in the Union

VAT Codes – ExpenditureCode NameP1 Standard ratedP0 Zero ratedPE ExemptPN Outside Scope

VAT Codes – IncomeCode NameS1 Standard ratedS0 Zero ratedSE ExemptSN Outside Scope

Appendix 2 – Transaction Codes

This is comprehensive list of the codes that you may use on various items of documentation such as income forms, claim forms, purchase orders, etc.

Income CodesCode Name430 Donations550 Sponsorship580 Ticket Income590 Travel450 Goods and Services

Expenditure CodesCode Name600 Acts605 Affiliation Fees640 Consumables725 Copyright & Royalties650 Cultural Activities655 Decorations680 Entrance Fee Competition675 Entrance Fee Conference685 Equip purchase (not cap)690 Equipment Hire705 Goods for Resale710 Ground Hire730 Hospitality735 Instructors820 Printing Costs825 Publicity860 Stationery870 Subscriptions895 Travel Expenditure

Code Name Description

0 Grant Union money allocated by your Management Group

1 Self-Generated Income

Club money generated through trips, goods and services, etc

2 Harlington Trust Money from the Harlington Grants Committee

3 IC Trust Money from the IC Trust

4 Faculty Grant Income from a College Faculty


Appendix 3 – Management Group Contacts

These positions are held by students who volunteer their time to carry out these roles.

Group Chair TreasurerACC Monya Zard

[email protected] [email protected]

AEB Adam Khamis [email protected]

James Geraets [email protected]

CAG Nicolas [email protected]

Christopher [email protected]

CGCU Victor du Mesnil du [email protected]

Tsz Shing [email protected]

GSA Deena [email protected]

Llewellyn [email protected]

ICSMSU Clubs & Societies Officer – Adam [email protected]

Benjamin [email protected]

Media Matt [email protected]

Brigette [email protected]

OSC Ahmad [email protected]

Chia Wei [email protected]

RAG Naida [email protected]

Tessa [email protected]

RCC Nathaniel [email protected]

Michael [email protected]

RCSU Scott [email protected]

David [email protected]

RSM Benjamin [email protected]

Mark [email protected]

SCC David [email protected]

Kajann [email protected]

Silwood Mark [email protected]

Jennifer [email protected]

Finance Operations


Imperial College UnionBeit QuadranglePrince Consort RoadLondon SW7 2BB

Tel: 020 7594 8060Fax: 020 7594 8065Email: [email protected]

Finance Operations v1.5

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