Initial setup questions for a small non-profit membership startup (UK)

Wm wm+gnc at
Wed May 20 16:08:18 EDT 2015

Wed, 13 May 2015 08:23:20 < at> 
Cylindric <mark at>

>Hi folks. I'm sort of starting out with this sort of company, which is 
>non-profit membership organisation.

It either is or it isn't, the Charities Commission is your starting 
point (I'm in the UK too) if you want to formalise it or tell folks 
whether you're actually non-profit or not.

>I'm going to need to record basic stuff like bank, rent and bills and 
>which is fine and I've done before, but I'm not sure how to handle the
>members and their subscriptions. From time to time we may also sell 
>to our members.

You've had good advice in the two replies so far.

I'd like to re-enforce that the legal situation in the UK is not 
consistent (Scotland is different to England and Wales, for e.g.) and 
can be very different to that in some other countries like the USA where 
it varies from state to state.

You should be careful what you invoice formally (i.e. make a demand for 
payment) vs what you expect informally and what people have said they 
will pay you.  Think carefully about whether you want to account as 
turnover the amount you expect or the amount you receive (it is very 
different elsewhere, you should start with receipts only, promises are 
for the future and un-enforceable).

The Charities Commission (if you are a small enough org) will allow you 
to work on a cash basis.  This is useful if you *do* *not* charge / send 
invoices / demands for payment, etc.  But you need to be squeaky clean 
about that.

I was going to use Customers, but I can't see how to create
monthly-repeating transactions for Customers, so should I set them up as
Accounts Receivable accounts, and use normal recurring transactions?

I'm also getting a bit confused with the number of transactions I'm
creating, as I currently have, for example:

£25 invoice in *Assets:AR:PersonName* to *Income:MembershipFees*
£25 payment from *Assets:AR:PersonName* to *Assets:Current:Bank*

A person might pay for 6 months up front, but I'll only want to "take 
their fee monthly.

How does that sound? I realise it's probably all a bit wonky :)

If someone pays 6 months up front you don't have a choice, you *must* 
recognize it, it happened.

You could treat the 5 forward months as a liability but
a) I suggest you bank the money you've received
b) by creating a liability you're fucking with the Charities Commission 
and they were trying to be nice to you by saying you could use cash 
accounting because it was simpler.

Be careful, honest non-profit orgs are given many chances to prove their 
worth, those opportunities should not be abused on a whim.  Offered the 
chance of recording things correctly in gnc as my accounting app and 
figuring out who promised what in a spreadsheet I'd do the formal in gnc 
and the informal (but legal!) in a spreadsheet.

The world of differences is wonderful, if you're in the UK, acknowledge 
that, the regime in some USA states (which I think you were heading 
towards) doesn't necessarily apply.

Best wishes.


More information about the gnucash-user mailing list