Upon completion of this module the reader will know and understand the following:
- Why do you need administration?
- What are the basic principles of administration in a co-operative?
- Who are responsible for the administration?
- Why is record keeping an important part of administration in a business?
- Which Business records do you need to keep?
- What are basic principles of files and filing systems?
How to do it
It is important to have solid and well run administration. Sound administration is the cornerstone of any business.
Without proper administration, a co-operative can lose out on important aspects of the business. Administration forms part of planning and without proper planning a co-operative will fail. Administration is the culmination of all the aspects such as record keeping, financial management, and minutes of meetings, correspondence, the business plan, market research and a whole host of additional activities that forms part of the day to day running of the co-operative. Many co-operative businesses fail because they lack the skill to do effective administration or they are too lazy to complete the paper work. Administration is the co-operatives paper trail; if this is lost the co-operative will find itself in trouble.
What are the basic principles of administration in a co-operative?
- Create clear, simple and logical categories that are appropriate
- Establish a system that allows you to find any document within 20 seconds
- Keep the most frequently used files closest to you or on the desktop of your computer, and store inactive files in a less accessible location or archive it on your computer
- Design your system so that it is easy to add new documents to the appropriate file
- Develop a procedure for defining and destroying obsolete and/or unnecessary documents and files
- Ensure that access to files is controlled
Who are responsible for the administration?
- The manager of the co-operative is responsible for appointing a person with the necessary qualifications or experience to fulfil this task
- All members and Directors are responsible to ensure that important files and documents are in safekeeping
- The Manager will ensure that all relevant documents such as: financial documents, Registration documents, the business plan, reports and staff documents are properly filed and placed into a locked filing cabinet.
Why record keeping is an important part of administration in a business
- Maintaining good records of your transactions and tax invoices will help you to manage your cash flow and make sound business decisions.
- It will also make it easier for you to meet your tax obligations, and potentially save you time and money in the future.
Good record keeping
- makes it easier for you to meet your tax obligations
- makes it easier for you to understand how your business is doing
- helps you make good business decisions.
- Record keeping is a legal requirement. By law you must keep business records for at least five years, either on paper or electronically. They must be in English or in a form that can easily be converted.
- If you don’t keep the right tax records, you can incur penalties. Poor record keeping is also one of the main reasons why some businesses fail.
Business records you need to keep
- tax records if applicable
- You must keep records of all your sales (income) and expenses to prepare your business activity statements
- You also need to keep year-end and bank records.
- Records of all sales transactions – for example, invoices including tax invoices, receipt books, cash register tapes and records of cash sales.
- Expense or purchase records
- Records of all business expenses, including cash purchases. Records could include receipts, invoices including tax invoices, cheque book receipts, credit card vouchers and petty cash to record small cash expenses. Records showing how you worked out any private use of something you purchased.
- Annual financial statements, Budgets, Cash flow statements
- These include lists of creditors (that you owe money to) or debtors (that owe you money), and worksheets to calculate the decreasing value of your assets, also called ‚depreciating assets‘, stocktaking sheets and capital gains tax records.
- Documents you receive from the bank such as bank statements, loan documents and bank deposit books.
Minutes of meetings
- Various meetings are held within a co-operative and accurate minute taking is important, to ensure that all information shared is correct.
- Minutes must be typed and ready to be tabled at the next meeting held. A separate file must be opened and kept for each sector for example: Directors, Staff, Members, Annual general, and Special general meetings
If you have employees you will need to keep:
- Employee contracts
- Copy of employee identity document
- Leave forms
- Employee correspondence
- records of wages, allowances and other payments you make to them
- records of fringe benefits you provided
Co-operative member’s records
- Members Registration forms
- Members share certificates
- Members Annual subscription fee
- Membership fee
- Membership resignation forms/or any other forms that are signed as proof that member no longer forms part of the co-operative
Files and filing systems
- Most administrators use a desktop computer or a laptop.
- Although this practice allows an administrator to capture important information, hard copies of the documents must be filed as well.
- The administrator can use whatever method that will efficient
- Keep separate files appropriately marked as a hard copy and scan a copy into the computer to store as a soft copy. The administrator must ensure that all electronic files have been backed up in case of a computer network crash.