We hosted our final webinar “The Secret to Mastering Year-End for Town and Parish Councils” for this financial year. During this event I introduced the idea of The Hierarchy of Needs and The Cashbook Crisis™. This blog is focused on this concept.

To watch the full recording of the webinar,📽️ click here to access and download the slides, 🖥️ click here. The Q&A is at the bottom of the blog.

⏏️ Hierarchy of Needs

We kicked off the event with a quick poll. To understand the biggest concerns right now to identify where clerks and RFOs need help.

Results

We had 55 responses, and this is how the participants voted…

• Workload - too much time spent on year-end - 53%
• Reserves - managing and reporting - 37%
• No Help - lack of training and support - 37%
• VAT - tracking and reclaiming - 16%
• Compliance - worried about data security - 16%
• No worries - "I am happy as Larry" - 9%
  

As you see, the workload came out on top.  This poll validated our assumptions based on 100s of conversations I have had with Clerks and RFOs in England and Wales.

⏏️ Hierarchy of Needs

The poll set the backdrop for when I introduced The Hierarchy of Needs for Local Council Accounting.  The framework very loosely borrows from Maslow's Hierarchy of Needs. It provides a structure to the information architecture (a.k.a “needs”) required to efficiently manage financial accounts for parish, town and community councils.  Starting from daily administration to being fully accountable to the public for that spending.

The model is self explanatory, like with everything in life, if you take care of the basic needs (the administrative layer), then the higher value needs should theoretically fall into place.

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😱 The Cashbook Crisis™ 

However, in reality, I have found new customers have previously found Year-End is a stressful and time-consuming process. So in practice, it's not working. For this, we coined the term The Cashbook Crisis™.

I believe the cause of this stress is because the basic needs are not met by. I offer 3 pieces of advice.

1. Follow the "Cashbook First" approach
2. Use simple checklists to manage your process
3. Adopt purpose built software for managing your cashbook

I share all the details in this 5minute video, and you can access and download the slides here.

🙋 Questions and Answers

Q. Do you include the VAT reclaim figure in the receipts & payments approach?

A. You do - VAT is included when working in Receipts & Payments so the figures come straight from the cashbook.  VAT is only shown as an adjustment (debtor or creditor) when working in Income & Expenditure. 

Q. Is JPAG March 2021 the latest copy or is it being updated?

A. This is the latest version currently available but is being updated imminently. 

Q. If you’re using R&P, is a VAT refund a receipt or a negative payment?

A. A VAT refund is a receipt and will appear in Box 3 along with any other receipts received. 

Q. long term investment - is it 2 year plus?

A. Long-term investments are those over 1 year.  They should be listed on the Asset Register and be included in the Box 9 figure for Fixed Assets & Long-Term Investments. 

Q. Timeframe of Exercise of Public Rights

A. The Exercise of Public Rights Notice must be displayed for 30 days.  It does not matter if this notice is displayed for a longer period of time but it must be for a minimum of 30 days.

Q. re Vat repayment - is it included as income then?

A. It is and will be included in Box 3 if you are working in Receipts & Payments.  

Q. If a resident has issues with the AGAR/Council's activities can they go straight to the External Auditor with queries or are they supposed to go to the Parish Council first?

A. A member of the public can go straight to the External Auditor with their issues. The Council will then be informed of these and an hourly charge will be made for work the external auditor has to carry out in respect of the queries made.

Q. Will the AGAR form get sent to us automatically, or do we need to get it from somewhere?

A. No PKF Littlejohn email with the AGAR details.  This has not been sent out yet.  Keep an eye on their website too as details may go on before the email is sent out to Clerks.

Q. Accruals, Is this just for Income and Expenditure or both?

A. Accruals along with any other Year End adjustments such as those for creditors or debtors are only relevant to Income and Expenditure.  The Receipts and Payments approach records when transactions take place regardless of when they relate to.   

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