Initial setup questions for a small non-profit membership startup (UK)
zen148517 at zen.co.uk
Thu May 21 01:42:30 EDT 2015
Hi. Not sure if you have sorted this out yet, but here's my penny's
worth! I am Treasurer for a non-profit club in the UK. Not a charity
and I am not an accountant or anything! But here's how I do mine.
Our members pay subs annually and often pay in advance. When they pay,
say, 5 years subs, I place amount for one year in the income>subs
account and then the rest as liability. ie...
Bank Account: £50
Income > Subs: £10
Liabilities > Subs > 2016: £10
Liabilities > Subs > 2017: £10
Liabilities > Subs > 2018: £10
Liabilities > Subs > 2019: £10
Then, on 1st Jan each year I transfer the funds from liabilities > subs
> #year to Income > Subs
On 20/05/2015 21:40, Cylindric wrote:
> It's not quite that tricky, we're non-profit, but not a charity. We're
> allowed to sell stuff and make money etc if we can, but it's a "surplus"
> and not a profit, and there are restrictions on what we can spend it on in
> our constitution.
> On 20 May 2015 9:52 pm, "Wm [via GnuCash]" <
> ml-node+s1415818n4678408h72 at n4.nabble.com> wrote:
>> Wed, 13 May 2015 08:23:20 <[hidden email]
>> Cylindric <[hidden email]
>>> 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.
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