Finance

Choice of Bank and Opening Bank Accounts

It is recommended to choose big 4 banks (WBC, CBA, ANZ, and NAB). It is important to have a dedicated relationship manager from the chosen bank. The bank accounts to open are business transaction / cheque account, business online saver account, and term deposit account.

 

Delegation of Authority

Board of the CRC should establish a delegation of authority that clearly defines the delegation the board has provided to CRC management for matters of contracts and approving payments made by the CRC

This should include the use of and limits for Credit Cards issued for the CRC’s bank account.

 

Segregation of Duties and payment controls

The CRC should ensure that segregation of duties and dual authorisation of payments are system-enforced controls within any payment platform the CRC utilises.

 

 Accounting Software

As most of CRCs are small to medium organisations, it is recommended to use Xero as their accounting software.

 

Chart of Accounts

An example of CRC Chart of Accounts can be found below:

*Code	*Account Name	*Account Type
11010	Business Trading Account	Bank
11020	Term Deposit	Bank
11030	Bank Guarantee	Bank
12010	Trade Debtors	Accounts Receivable
13010	Other Debtors	Current Asset
13020	Deposits Paid	Current Asset
13030	Prepayments	Current Asset
13040	Accrued Income	Current Asset
19110	Computer Equipment	Fixed Asset
19120	Accumulated Depreciation - Computer Equipment	Fixed Asset
19130	Office Equipment	Fixed Asset
19140	Accumulated Depreciation - Office Equipment	Fixed Asset
21010	CRC Credit Card	Bank
22020	Trade Creditors	Accounts Payable
22030	Accrued Expenses	Current Liability
23010	Other Creditors	Current Liability
23020	Deposits Received	Current Liability
23030	Prepaid Revenue	Current Liability
24010	GST	GST
24030	GST Clearing	Current Liability
24040	FBT Payable	Current Liability
25010	Superannuation Payable	Current Liability
25020	PAYG Withholding Payable	Current Liability
25030	Wage Payable - Payroll	Current Liability
25040	Annual Leave Liability	Current Liability
26010	LSL Liability	Non-current Liability
30800	Retained Earnings	Retained Earnings
41000	Contributions - Industry Partners	Revenue
41100	Contributions - University Partners	Revenue
42000	Government Grants - CRC Program	Revenue
42100	Government Grants - Other	Revenue
43000	Other Income	Revenue
44000	Interest Income	Revenue
497	Bank Revaluations	Bank Revaluations
498	Unrealised Currency Gains	Unrealised Currency Gains
499	Realised Currency Gains	Realised Currency Gains
60110	Accounting and Tax	Expense
60120	Audit	Expense
60210	Recruitment	Expense
60310	Bank Fees	Expense
60410	Consultancy - Support	Expense
60420	Consultancy - Management	Expense
60510	Directors Fees	Expense
60610	Entertainment	Expense
60710	FBT Expense	Expense
60810	Insurance - General	Expense
60820	Insurance - Workers Compensation	Expense
60910	IT - Data	Expense
60920	IT - Hardware	Expense
60930	IT - Software	Expense
60940	IT - Hosting	Expense
61110	Legal Fees	Expense
61210	Marketing - Events and Conferences	Expense
61220	Marketing - General	Expense
61310	Membership Fees	Expense
64010	Occupancy Rent	Expense
64020	Occupancy Fitout	Expense
64030	Occupancy Other	Expense
64340	Office Supplies	Expense
64350	Office Catering	Expense
65610	Telephone & Mobile	Expense
66110	Travel Domestic - Flights	Expense
66130	Travel Domestic - Accommodation	Expense
66140	Travel Domestic - Other	Expense
66160	Travel Domestic - Per Diem	Expense
66210	Travel International - Flights	Expense
66220	Travel International - Accommodation	Expense
66230	Travel International - Other	Expense
66240	Travel International - Per Diem	Expense
66315	Scholarships - PhD	Expense
66325	Scholarships - SRA	Expense
66330	Scholarships - Travel Allowance	Expense
67010	Staff - Wages	Expense
67020	Staff - Annual Leave	Expense
67030	Staff - LSL	Expense
67060	Staff - Superannuation	Expense
67090	Staff - Other	Expense
67200	Research Expenditure	Expense
67500	Project Expenditure	Expense
68010	Depreciation Expense	Expense
860	Rounding	Rounding

 

Financial Models

Financial models are essential tools to ensure that the organisation’s financial health is maintained while delivering on its mission. These models help track cash contribution revenue sources, manage research expenses and staff cost, assess sustainability, and measure impact. Below are key financial models and approaches that CRCs typically use:

1. Profit & Loss Statement (Income Statement)

This is the primary financial statement used to monitor income and expenses over a specified period, such as monthly, quarterly, or annually. For a CRC organisation, the purpose is to ensure financial sustainability while fulfilling the organisational mission.

Key components:

Revenue: This includes Commonwealth grant, cash contribution from both university and industry partners, and other sources of income.

Expenses: These are the costs related to delivering programs, administration costs, staff salaries, PhD scholarship, and other operational costs.

Surplus or Deficit: The result of income minus expenses. A surplus can be reinvested into future programs or saved for future operational costs.

2. Balance Sheet (Statement of Financial Position)

This provides a snapshot of the CRC’s financial position at a particular point in time, listing assets, liabilities, and net assets (equity). For CRCs, equity is often referred to as "net assets."

Key components:

Assets: What the organisation owns, including cash, term deposits, Prepayments, and equipment (fixed assets).

Liabilities: What the organisation owes, including loans, unpaid bills, and other debts.

Net Assets (Equity): The difference between assets and liabilities. This is the portion of the organisation’s value that belongs to the CRC after all debts have been accounted for.

3. Cashflow Forecast

This document tracks the flow of cash into and out of the organisation. It helps to assess whether the CRC has enough liquidity to meet its operational needs and manage its research activities effectively.

Key components:

Cash Inflows: Cash received from grants, cash contributions from both university and industry partners, and interest income.

Cash Outflows: Payment of research activities, PhD scholarship costs, and operational expenses.

4. Aged Receivables Report

An Aged Receivables Report is a financial tool that categorises outstanding invoices or amounts owed to a CRC, based on how long the payment has been overdue. The report typically segments receivables into the following time brackets:

Current (0-30 days): Receivables that are within the payment terms.

30-60 Days: Receivables that are 30 to 60 days overdue.

60-90 Days: Receivables that are 60 to 90 days overdue.

90+ Days: Receivables that are more than 90 days overdue and considered high-risk for non-payment.

This report can be generated by most accounting software and helps CRCs track overdue partners’ cash contribution, prioritise collections, and take necessary actions to recover funds.

5. CRC Budget Model

The budget helps CRC allocate resources to specific research projects and assess the financial efficiency of each program. A CRC budget model typically consists of several key components that ensure transparency, accountability, and financial health while aligning with the organisation’s mission and goals. Below are the essential components of income and expenses to develop a budget model for a CRC.

Income Sources: Government grants as per the CRC Commonwealth agreement and payment milestone, university and industry partners’ cash contribution as per agreed contribution schedule, and other revenue (including interest income). 

Expenditure Categories: staff costs, research project expenditures, PhD scholarship costs, education & capacity building, commercialisation costs (at later CRC stage), insurance, travel, auditing, IP & technology, and other operational expenses. 

By creating a clear and detailed budget, a CRC organisation can ensure a balanced approach to financial health, mission delivery, and transparency with members.

 

Financial Reporting

 Recommended financial reporting cycle and process includes:

• Monthly financial reports (Profit and Loss Statement, Balance Sheet, and Aged Receivables) reviewed by the management team
• Quarterly financial reports (Profit and Loss Statement, Balance Sheet, Cashflow Forecast, and Aged Receivables) to be presented to the Audit Risk Finance Committee and the Board
• Annual budget and cashflow forecast to be endorsed by Audit Risk Finance Committee and approved by the Board