Paypal transaction split confusion

[Mike or Penny Novack]

On 4/19/2016 12:48 PM, Derek Atkins wrote:
> Hi,
>
>
>> I wish I was a programmer, I would love to build a pledge income system.
>> Instead of invoices, it would be for pledge receipts and work exactly like
>> the invoice structure.
> No time like the present?  ;)
>
Actually, you have that backwards (in terms of what is really going on). 
As far as the needs of nonprofits go ........

1) Invoicing for  "accrual" (what is invoiced is treated as a receivable 
--- that is what we have now as usual for businesses)
2) Invoicing for "cash basis" (no legal obligation to pay that invoice)
3) Ideally unified statements.

The reason I said "backwards" is that the PLEDGES are in fact 
receivables << there is a legal obligation to pay a pledge >> but things 
like MEMBERSHIP DUES are not << you are allowed to quit a voluntary 
organization at any time --- the organization by its rules MIGHT be able 
to asses a member who sought to rejoin, but that's another kettle of 
fish and in any case the back dues amount usually negotiable >>

Luckily I don't have to produce invoices because all of the orgs I do 
the books for are on the cash basis. If I did have to, I would probably 
use a set of subsidiary books kept on accrual basis to do the invoicing 
and keeping track of member accounts << it would be just the gross 
amounts deposited to the (real) bank account in the real books. In other 
words the total of membership dues and extra donations, so not all that 
much extra work >>

BTW, pledge accounting raises all sorts of other issues. Just because a 
pledge is a receivable doesn't mean that it is all currently receivable. 
Suppose somebody said "I pledge $1000 in 2016 and $1000 in 2017." That 
means that they would CURRENTLY owe the organization $1000, not $2000.

If this were a forum instead of a mail list, I would be suggesting a 
special section for "non-profits", because while some of what we 
treasurers of non-profits do is just like business accounting some of is 
not.

Michael D Novack