All clubs - whether it’s a large, commercially minded rugby club or a small junior football club - should have a reserves policy in place.
But what is it? In a nutshell, it’s a policy that establishes the right amount of reserves for your club.
It will:
- List the reasons why the club needs to hold cash reserves
- Consider how much the club needs to hold in reserves
Your financial plans should be built around your reserves policy to make sure your club is stable. It’s also a good way to demonstrate your solid financial management and accountability to the club’s members and supporters.
To establish the right amount of reserves for your club, you will need to look at:
- The different financial risks that the club faces, eg cashflow, unforeseen events
- Its current and future income including the reliability of that income
- Its current and future expenditure, including any capital items like equipment or facilities
- Funds needed for reaching the club’s objectives
When developing your reserves policy, you will need to consider short term and long term ambitions for the club as well as any risks you face with your expected income. That will help you determine the amount of reserves you will require.
If you would like to see an example, we have a 'Reserves Policy' in our downloads section.