July 2008 - ERA Finance Committee

My Experience as Treasurer of ERA

By Lee Swanson

In July 2006, I became treasurer of the Electronic Retailing Association (ERA). My background has been in finance so the transition into this position has been less cumbersome than I initially expected. I came into this position at a time when the financial status of ERA was relatively stable. Therefore, the objectives of the Finance Committee evolved from one of managing the financial stress of a growing organization to one of establishing processes for managing cash flow, investments and the budgeting process.

The purpose of the Finance Committee is to oversee the finances of ERA, ensure that principles of accounting practices are being adhered to and provide financial guidance to ERA’s staff where necessary. The main objective of the Committee is to ensure the revenue generated by the membership is appropriately returned to its members in the form of member benefits. The last two trade shows are a reflection of just that.

The 2007 ERA Annual Convention in Las Vegas set an all-time record for attendance and the turnout for the keynote speakers and education sessions were at capacity. With the ever-changing DRTV market, ERA has the responsibility to provide its members with information to help member businesses thrive and prosper. The Finance Committee has been and will continue to be an avid supporter of quality and meaningful education.

Another objective of the Finance Committee is to oversee cash flow. With over $3 million in cash and investments, it is critical to make sure that ERA is properly positioned to sustain its operations in the case of a sustained recession or catastrophic loss. Since the majority of the Association’s revenue is generated from trade shows, the Finance Committee has mandated that at least six months of operational costs be kept in investment reserves to ensure that ERA has sufficient cash to maintain operations in the event of a tradeshow loss or a significant reduction in attendance.

The third objective of the Finance Committee is to provide financial guidance to the ERA staff. The members of the Committee are intimately involved in the budget process. Each fiscal year, the ERA department staff reviews their department budgets with the Finance Committee. One of the challenges the Committee faced this year is figuring out how we as an organization can respond financially to the changing DRTV market. How much money do we allocate to education versus membership recruiting versus Electronic Retailer magazine? For example, Electronic Retailer magazine is revamping its strategies for the future.

With more emphasis on online initiatives, it is imperative that the magazine provides the membership with relevant online content, along with the resources-such as the eZine, Electronic Retailer 24/7, and an online retailer directory-that make such online content more electronically accessible. All of these initiatives cost money and the Finance Committee must aid in providing a budget that suits the needs of ERA’s membership.

Overall, the experience has been very rewarding and educational for me. Yes, it requires time, but at the end of the day, I have a much better understanding of the significant role the Electronic Retailing Association plays in shaping our industry.

Lee Swanson is a consultant for the West Corporation. In addition, he serves as treasurer of ERA’s Finance Committee and is a member of the ERA Board. Swanson can be reached at [email protected].


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