Banking

Being part of a travel sports team is a serious commitment. Parents, coaches, and players all have to put in lots of time and effort for a team to be successful.

At Snap! Spend, we believe that participating in competitive sports develops kids into both better athletes and better people. The principles of hard work, sportsmanship, teamwork, and leadership are just a few of the benefits that come with being on a youth sports team.

As travel teams grow, so too do the administrative needs of the team. Between travel accommodations, scheduling practices, games, and tournaments, ordering new equipment, and keeping up with the finances of the team, it can become overwhelming.

There comes a time when it makes sense to automate team payments to simplify the back-office needs of the team and put the focus back on the field. Here’s why it makes sense for the top teams to do just that.

The Benefits of Automating Youth Sports Payments

1. Get Paid on Time.

By using an automated payment system, travel teams can cut down significantly on missed or late payments. You don’t have to worry anymore about forgotten due dates, misplaced checks, or this month’s cash flow. Getting paid on time makes it easier to run the team and budget each month of the season. Tournament fees due soon? No problem. You can be confident that you’ll be paid on time and have the money for the tournament by the due date.

2. No more time spent collecting checks and running to the bank.

Collecting team payments by hand is a hassle. First, you have to worry about everyone knowing when payments are due. Next, you have to count on coaches, parents, and players to all remember to get the money in on time. Then, you have to stay organized with all of the cash and checks collected, plus spend time running them to the bank. With an automated payment solution, you cut out all of these issues.

3. AutoPay is easier for parents

Between a full-time job, running a family, traveling on weekends with the team, and dozens of other things on their plate, writing a check for travel team dues each month is one additional thing to remember for parents. With AutoPay, parents can be confident that travel team fees will be taken care of each month. Plus, they can work it into their monthly budgets as they’ll know exactly when and how much will be taken out each month. With all that parents put into the team, it makes sense to make paying as easy as possible for them.

4. Know in Seconds What is Paid and What is Owed

Keeping track of team payments can be a logistical nightmare. The team has to keep track of exactly who has paid what, and so do parents. Each payment has to be logged by hand, and there has to be communication between teams and parents about what exactly has been paid and what has not. With a serious travel team organization, organizing team payments can end up taking a large chunk of time. By using team payment software, parents and team administrators can log in at anytime and see exactly what has been paid and what is still owed.

5. It’s Easier To Space Payments Out Across the Season

It’s no secret: travel teams can be expensive. But without a payment system in place, some teams feel the need to take a majority of the fees upfront, rather than space them out evenly over the season. This makes the strain on parents even bigger. The rationale is that the team needs to be able to count on having that money to pay for their upcoming costs. Automating team payments provides teams the confidence that they will continue to get paid on time throughout the full season.

6. Enables Travel Team Organizations To Grow

Some small teams can get away without automating team payments. Sure, it may take time and effort, but maybe someone has volunteered to handle payments for the season. But if your travel team organization wants to have multiple teams at multiple age levels, collecting by hand quickly becomes unsustainable. Imagine trying to keep track of 50+ players across 5+ teams. It becomes a full-time job! Any travel team organization with multiple teams or that expects to grow in the future should have a reliable payment system in place.

7. Cut Coaches Out of The Collection Process

Once payments are automated, coaches can go back to what they do best: developing youth athletes. Oftentimes, coaches get bogged down with a lot of the administrative tasks of a team. This can have a couple of effects. First, coaches can become distracted, and not spend as much time on the actual coaching. And second, this can drain coaches’ passion for the position, as they end up “managing” the team more than coaching it. By automating team payments, coaches can put their full focus back on the field.

8. Add Transparency and Accountability to Team Collections

Without a system, team payments are mostly made in the dark. Recordkeeping can be inconsistent, and occasional disagreements about what has been paid can arise. There have also been instances of embezzlement, such as this New York Times article titled “The Trusted Grown-Ups Who Steal Millions From Youth Sports.” A payment system can add transparency and accountability to this process, and help cut down on these conflicts.

9. Having A Professional System To Stay Organized and Attract Serious Players

A team payment system is a sign that your team runs efficiently and effectively. When top players in your region are looking for a new team, having an automated collections system can be an advantage that you have over other teams. Parents love the system because it makes things easier on them, and having a system in place lets them know that your team is run professionally.

Open a Digital Bank Account with Snap! Spend

Here at Snap! Spend, we’re dedicated to making managing your club’s money easy, starting with opening a bank account. Snap! Spend’s digital banking platform gives you an online bank account with built in online payments to collect dues and budgeting tools to track spending. It’s the easiest way to manage your club’s money.

As part of Snap! Spend’s goal to share best practices and help educate youth sports organizers, we’ve invited special guest author, Monica Burgeson CPA, to share her expertise on managing team bank accounts. Monica is the Former CFO of Colorado Rapids Youth Soccer Club (formerly Colorado Storm Soccer Association) where she managed over 300 team bank accounts. She specializes in nonprofit management and advises the Colorado Soccer Association on financial best practices for youth soccer organizations. Prior to working with nonprofit organizations, Monica worked as a CPA for PwC’s audit and assurance practice.  She currently serves as the Director of Finance for the US Center for SafeSport.

Introduction

Many nonprofit organizations establish a cash management policy after cash has gone unaccounted for, or even gone missing.  Given their lack of resources, it’s common for nonprofits to have volunteers handling money, which creates more opportunities for money to be mishandled. As a result, millions of dollars go missing every year in youth sports alone.

As youth sports organizations grow larger, many utilize team bank accounts that are managed by volunteer team treasurers. This enables teams to operate semi-autonomously and minimize the burden on the club administrators. While this can provide a win-win for the club and team for operating flexibility and cost, it creates risks for the club when not managed correctly.

The Center for Fraud Prevention, which helps youth sports associations fight theft and embezzlement, describes three reasons why youth sports organizations are uniquely vulnerable to fraud:

  1. Members are volunteers and managing the money is a job that no one wants. This results in treasurers who have little financial experience and a situation ripe for abuse.
  2. The organization lacks formal structure and systems of oversight and accountability of volunteers handling money.
  3. Volunteers are part of the community they serve. This creates an environment of trust which weakens oversight and emboldens volunteers willing to steal from the organization.

In this article, we’ll talk about how clubs that utilize team bank accounts can do so with confidence.

Risks of improper management of team accounts

The first step in effective management of team accounts is to gain an awareness of the specific risks involved when volunteers manage money and act as official signers on team bank accounts.

Risk #1: The team treasurer goes rogue

One of the most common occurrences with volunteers handling team bank accounts is that the team treasurer goes rogue and mishandles team funds in some way. This can range from the relatively benign — like not following the club’s policy on how to reimburse coaching expenses — to outright theft.

It’s important to remember that team funds are the collective funds of families who pool their resources for the benefit of the team. When a team treasurer goes rogue, they are stealing from all of the families. When money goes missing, families will look to your club to rectify the situation.

But the loss to a club isn’t just financial. When money is mishandled, families assign blame to the club for poor oversight, and the club suffers potentially long-term reputational damage with the community.

Risk #2: Club administration is not accountable to its members, donors or funders

Club administrators are often not able to answer questions about how much money is being held in a team bank accounts because volunteers are in charge of establishing and maintaining these accounts.  Although the team accounts are set up under the umbrella of the club, funds are managed by volunteers, so club administrators do not see how much each player/family has contributed to an account.  Clubs may not be notified when donations have been made, or if each player is not contributing his/her fair share.  When issues with team accounting arise, members expect the club to step in to resolve the issue and cover any outstanding balances.  Moreover, volunteers are put in an uncomfortable position to manage team financial matters.  This often leads to issues beyond inaccurate financial reporting, such as team turmoil and loss of players.

Risk #3: The club fails an audit for insufficient financial controls

A major part of any outside audit is examining the financial controls of an organization. Auditors will see team accounts as an extension of the club and look for systems of accountability and control over these funds. Not having effective financial oversight and controls over team funds is a risk for clubs failing an external audit.

In order to minimize, or even eliminate these risks, a club must establish best practices related to how they handle team accounts and volunteers.

Best Practice #1: Establish financial controls

In this section, we share prescriptive advice for how clubs should establish financial controls over team accounts.

The club should open and control team bank accounts

The only way for the club to establish financial controls over team funds is for the club to control the team bank account. Giving the club the ability to access bank records and remove signers from the account provides the most basic level of financial oversight.

In a similar vein, clubs should prohibit the use of personal Venmo or PayPal accounts to collect payments from families since clubs have no visibility or control into these accounts.  Even if these accounts are only set up for the team, volunteers must provide personal information and the accounts are not transferable.

Establish clubs policies in a team handbook

The club should set “ground rules” for how team treasurers manage money, including the club’s policies on acceptable expenses, record keeping and ways of doing team fundraising.  Any donations made to the team should go through club administrators, not directly to team accounts.  The Colorado Rapids Team Treasurer Handbook is an excellent example of a well thought out set of ground rules.

Note from Snap! Spend: Snap! Spend provides all of our customers with a Snap! Spend Team Treasurer Handbook Template as a starting point for them to create their own handbook for using Snap! Spend’s all-in-one team financial management solution with built-in oversight and controls.

Establish and review team budgets

One of the best ways team treasurers can communicate the financial plan for the season is to complete and distribute a team budget to all players and families. To make this an effective tool, the club should create a uniform template for team treasurers and require that it is completed, and turned in to club administration, prior to the team’s first game (or some other deadline established by the club). The team budget, or team plan, should include all tournament registrations fees, trips and travel expenses, plus any other events that will involve team coordination and payments.

It is important for clubs to remember that volunteer team treasurers may not be familiar with how to complete a budget template, so it should also come with clear instructions.  Lastly, the club should periodically review the budget vs actual spending, or at the very least when the season ends. Reviews ensure that team spending is in-line with club policy; moreover, communicating to treasurers that reviews will be performed and records must be kept creates an environment that is less prone to abuse. If time is limited, a random sample of teams can be reviewed instead.

Best Practice #2: Account for team funds

Part of any external audit will require clubs to provide the balances and monthly reconciliations of their cash accounts. Cash is classified as assets of the club. This can include operating accounts, savings accounts and investment accounts.

Classify team bank accounts as “pass-through” accounts

A common concern for clubs is that, by controlling team bank accounts, the club has to record and reconcile each account, or account for the cash in each account as income.  The reality is that the cash in the team accounts is not an asset of the club. Since team accounts function to pool money from families to pay for team expenses and the money does not belong to the club, clubs can classify team bank accounts as ‘pass through’ accounts, and carry the balance of these accounts as a liability account on their balance sheet.

It’s important to remember that team funds are not the club’s money — it belongs to the families, and the club is a temporary steward of the money to ensure accountability until the money is disbursed. At the end of the season, if any funds remain, they should be returned to the families, or applied to next season’s team expenses if the families continue with the team into the next season.

As teams funds are spent, the amount recorded on the balance sheet decreases. Clubs can track this liability as the total sum of the balances of all team accounts. The club does not need to reconcile every transaction, but should ensure that teams do.

Note from Snap! Spend: using our digital banking platform allows clubs to easily see and export the balances in each team account in real-time while providing an ongoing sum of all accounts so you can easily perform club accounting functions.

When discussing team accounts with auditors

If the club undergoes an external audit, they will have to explain the concept of team accounts and sufficiently document the controls that are in place to manage team accounts. Clubs will need to point out that, since the club does not provide services to ‘earn’ the money in the team accounts, it is not classified as income to the club.  Similarly, clubs will need to explain that team accounts are not assets of the club and, therefore, are not subject to the same testing or reconciliations that are required for the club’s operating accounts.

The control documentation should include the process of opening a team account, the requirement of submitting team budgets, plus dissemination of the treasurer handbook.  It should also detail the monitoring and reviews that are completed by club administration.

The bottom line

Team accounts managed by volunteers can be a great way to enable teams in your club to operate autonomously, while simultaneously minimizing the burden on the club administration. When going this route, it’s essential to establish effective financial controls and accounting for team funds.

In researching the best way to set up a team bank account for a youth sports team, we spoke to several banks and found out which accounts each bank offers to teams, as well as the terms and conditions of those accounts.

The relationship between sports teams and bank accounts is not an ideal one, as many of the fees require monthly balances or transactions throughout the entire year, while most sports teams operate on a seasonal basis.

With that said, here are the pros and cons of each of the four banks we talked to: Bank of America, US Bank, Wells Fargo, and Citibank. Keep in mind, your mileage may vary and banks change their pricing all the time.

Bank Of America

Bank of America offers the “Business Fundamentals” account to youth sports teams looking to set up a bank account in the team’s name. The team will be listed as an associated unincorporated non-business. Here are the pros and cons of this account:

Pros:

  • Online banking
  • Multiple people can sign for the account
  • Debit/credit card available (but separate application)

Cons:

  • $100 opening deposit
  • Monthly banking fee – Differs from state to state, but expect around $15 if requirements to waive fee aren’t met

How to Get Fees Waived:

To waive the monthly banking fee, the account must meet one of the following requirements:

  • Minimum daily balance of $3,000 during the month
  • Average daily balance of $5,000 during the month
  • If you have an organization with multiple accounts with Bank of America (perhaps one for each team), maintain a minimum daily balance of $15,000 during the month
  • Spend at least $250 on the team debit or credit card

With online banking, multiple signers, and the ability to apply for a team debit or credit card, Bank of America’s “Business Fundamentals” account can be a good option for youth sports teams. However, it can be difficult for teams to meet the requirements to waive the monthly banking fee, especially when outside of their season.

US Bank

US Bank offers the “US Bank Silver Business Package” to clubs and teams with no monthly charge. While the account does have a few restrictions, no monthly management fee makes this an enticing option for youth sports teams.

Pros

  • No monthly fees
  • Online Banking
  • Team Debit Card
  • No minimum balance required

Cons

  • $100 opening deposit
  • Only 30 deposits per month allowed
  • Only one owner and one signer with limited access allowed on account

This offering from US Bank is enticing for teams who want a basic bank account with no fees. However, larger organizations may run into an issue with only 30 deposits allowed per month if you’re collecting a lot of player dues by check. Finally, it’s unfortunate that the account only allows one owner and one signer, as this limited access does not make easy the financial transparency and flexibility that many teams strive for.

Wells Fargo

Wells Fargo offers two options for your youth sports banking needs. First, their “Simple Business Checking” account, and secondly, their “Business Choice Checking” account. The two accounts differ in their fees and restrictions, but you can upgrade or downgrade if you realize the other account may better suit your team’s needs.

Pros

  • Minimum deposit is just $25
  • Monthly management fee is waived for the first two months
  • Online Banking
  • Team Debit Card
  • Easy to switch between Simple Business & Business Choice account

Cons

  • Monthly banking fee – $10/month for Simple Business, $14/month for Business Choice
  • Limit on transactions – 50 transactions/month for Simple Business, 200 transactions/month for Business Choice
  • $0.50 per transaction after this transaction limit is met
  • Limit on cash deposits
  • $3,000 in cash deposits/month for Simple Business, $7,500 in cash deposits/month for Business Choice
  • $0.30 per $100 cash deposited after deposit limit is met

Ways to Waive Monthly Banking Fee

  • Use business debit card at least 10 times/month
  • Maintain a $500 average ledger balance for the Simple Business account; maintain a $7,500 average ledger balance for the Business Choice account

Wells Fargo’s offerings make it easy for a youth sports team or organization to get up and going with a team bank account without many up-front costs. The accounts do come with a monthly fee, but the requirements to waive these fees are relatively easy to achieve compared to some other banks. Finally, keep in mind that there are transaction limits, so you may have to monitor how often your account is being used each month.

Citibank

Citibank offers the Small Business Streamlined Checking account to youth sports organizations looking to open an account. This account offers a lot of transparency as it allows many different people in the organization to have access to the account. However, Citibank does not operate in all states, so you have to make sure there is a branch near you.

Pros

  • No initial deposit
  • Multiple signers on the account (up to 99)
  • Online banking
  • Non-signers can have online access

Cons

  • Monthly banking fee – approximately $17
  • Transaction limit – 250/month
  • Limited locations
  • Difficult to waive monthly banking fee

How to Waive Monthly Banking Fee:

  • Must have average daily ledger balance of at least $5,000

While the transparency of the account is attractive, the limited locations and monthly banking fee can make the Streamlined Checking account a tough sell for many youth sports teams. However, if you’re in an area where Citibank does business and maintain a high monthly balance, Citibank may be worth a look.

Open A Bank Account Online With Snap! Spend

Snap! Spend’s digital bank account has everything you need to manage your team or club finances. Groundwork helps you budget for expenses, track player dues, accept online payments and track spending all integrated with your digital bank account.

Collecting checks costs more than you may think, both in time and in money. The inconvenience of paying team dues by check is apparent to many parents, coaches, and team administrators, but not everyone realizes the true costs that checks have on a team’s collections process.

There are several steps that have to be completed every single time a check needs to be collected.

  1. As parent: Remember to pay
  2. As parent: Find checkbook
  3. As parent: Write a check
  4. As parent: Deliver a check
  5. As club: Get the check
  6. As club: Deposit the check
  7. As club: Reconcile the check

Going through this lengthy process every time a check needs to be collected is inefficient and prone to errors. Paying by check is easy to forget. Checks can get lost. Late payments are likely. Plus, accounting for checks is a manual process that is extremely time-consuming. Teams end up spending significant hours each week simply keeping track of payments.

The burden falls on the club to remind parents when payments are due, to collect the payments, and to keep track of it all. And while most teams operate on very tight budgets, ultimately the payments flow in when the checks are written, not necessarily when the team needs it most.

Teams spend more time chasing down money and end up with uncollected payments at the end of each season. Clubs that collect checks have 4.7x more uncollected dues on average than clubs that collect everything online. Moreover, clubs that collect checks find that they spend 5-10x more time collecting money than those that automate payments. For big clubs, this means $10,000s and hundreds of hours each season.

What’s the alternative to paying by check?

So, knowing that checks are an inefficient way to collect payments, what’s the alternative?

The answer is automated online payments.

With autopay, there is only a single one-time step that needs to be completed for team payments to be collected:

  1. Set up Autopay

Automated electronic payments mean less time spent and more money collected, even after accounting for processing fees. The reason every business accepts card payments is because it’s worth it. By collecting team dues on time and in full each season, organizations receive the predictable cashflow they need to operate smoothly.

The automation of the collections process saves youth sports teams countless hours each month in chasing down, collecting, depositing, and reconciling payments. By removing the hassle of collecting team payments, teams can put more time and focus back on the field.

“Even the parents who initially may not have been so happy about switching to electronic payments have learned to love the system because it really is so easy,” says Kristen Dean, Director of Finance of WAVE Volleyball, a club that uses Snap! Spend for automated electronic payments. “If you want to streamline your life and have sanity in your club, this is the way to do it.”

Open a Digital Bank Account with Snap! Spend

Here at Snap! Spend, we’re dedicated to making managing your club’s money easy, starting with opening a bank account. Snap! Spend’s digital banking platform gives you an online bank account with built in online payments to collect dues and budgeting tools to track spending. It’s the easiest way to manage your club’s money.