To arrange a free, no obligation consultation at a time of your convenience, call us now on 0419 657 267 or 0417 146 549

Non-Profit Bookkeeping - Setting up an Op Shop

Setting up an Op Shop!

Running an Opportunity Shop is becoming a valuable way for charities to raise funds. Clothes and household items are delivered free to the store and then resold. Remember, however, that Op shops are about people and are a place of purpose.

We suggest setting up a procedure that you would like your store to abide by. 
Here are some issues that you should consider
Memorandum of Understanding (MOU)This is a written agreement to clarify how the store will operate. It explains expectations of how the store will run and where money should be allocated.

Business Operations & Premises

Role of Parish Council - Suppose your Op Shop is run through the Parish. In that case, you will need to recognise that the Church Wardens and Parish Council are responsible for the shop's operation.

Health & Safety - Accidents are costly to the organisation. Your duty of care is to look after the public and any staff.

Fixtures and Fittings - Do you need to purchase fittings, or are the fittings needing replacement?

Occupational Health & Safety - You have a legal responsibility for the health & safety of all employees and volunteers working for us under the OH&S Act 2004 (OHS Act).   When engaging volunteers, it is essential that you ensure they have the appropriate skills, training & supervision to perform the work safely. You must protect the health & safety of both employees and volunteers under the OHS Act. The best way to manage these obligations is to have clear policies and procedures in place.

Bookkeeping & Accounting for Charities

Goods Not Sold - Not all donations are resaleable, and you should include in your budgeting any uplift of furniture items and costs associated with disposing of items.Insurance If you are a Parish Op Shop, your insurance should be covered under the Diocese's insurance policies. Please confirm this. Also, ensure that all injury or property damage incidents are reported, and in cases of the Parish reported in writing to the Registry and Parish Council. It is a requirement under Occupational Health and Safety that records of incidents are kept that result in injury to a person or contribute to psychological injuries such as personal threat or aggressive behaviour.

Financial Management - With the church, the treasurer or churchwardens are responsible to the parish council for the financial accounting of the Op Shop's activities - with the banking and accounting for the Op Shop being included in the processes and accounts of the Parish.  The Op Shop should not operate independently with its own ABN (Australian Business number). All Op Shop documentation should include the Parish ABN.  All financial transactions should be handled according to parish requirements, including GST. (goods and services tax).  Second-hand goods are generally exempt from GST. We suggest separating a working bank account from the typical Parish operating bank account.  The auditing of Op Shop activities is to be included in the auditing of parish accounts, which are reported to the Annual Parish Meeting in February/March each year.  Parish Council is responsible for the distribution of funds.

Local Council Requirements - Does your shop need a planning permit? Check with the Planning department of your local council. Business Zone 1 does not require a license. Still, you may need a permit if you are on church premises, predominantly if you are zoned residential. 

Pricing - It is vital to have a general pricing guide for items. Pricing of most goods sold in the shop should be in accordance with the prices on the price list. 

Controlling Stock  - Goods may only be removed from the shop for cleaning, repair or valuation. All goods removed from the shop must be recorded in the Goods Removed book provided for this purpose, together with the name of the person taking the goods and the date. When the goods are returned, the note in the book must be amended to indicate "goods returned" with the return date.

Cash-handling and Petty Cash - Competent staff members should only handle cash. During business hours, all currency should be securely stored. Outside of business hours, money should be stored in a safe. Petty cash generally is $100 and covers tea, coffee, sugar, milk, biscuits, cleaning products etc. Banking Banking of cash from sales should be carried out and banked every day. The takings are tallied against the sales record through the register or a daily diary. We suggest a monthly reconciliation and summary is generated to compare with monthly and annual figures to see how your Op Shop is running financially.

Do you require an Op Shop Solution?

Raising the standard of Financial Management for  Not-For-Profits.We are independent specialised bookkeepers set up expressly to support your Treasurer and Management team to make wise account decisions and focus on what matters.

Share this

Related Articles

Bookkeeping for non-profits - It is not always easy to do work for charities, not for profit or churches; however, a diligent approach is required to manage all financial matters.