Keeping an audit trail means that your financial information is organized so anyone, including you, can figure out what happened a year later and not get too frustrated in the process. The audit trail is established by keeping cash receipt and disbursement journals current, marking and filing paid bill, and keeping track of the money owed you. Keeping good records and books can do more for your organization than ensure legal operations. Information learned from financial reports can influence programs and fundraising. Comparing actual expenses and income to budget shows if you are on target or need to make changes.
Reports give information that can help make the board make responsible financial decisions.
Small organizations frequently use a monthly income and expense statement as the treasurer's report. This statement alone gives little information to a board of directors. To be valuable, income and expenses should be kept year to date, and compared with budget figures. The balance sheet provides information not available on income and expense statements. The balance sheet shows cash on hand, accounts receivable, accounts payable, and long term debt showing the total financial picture.