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

Jill Terry jill at babrees.co.uk
Mon May 25 23:36:55 EDT 2015


As the OP has not come back on this one I guess they have it sorted.

The UK does not have states but they do have local councils who are able 
to make bylaws. However, byelaws are restricted by the government and do 
not cover accounting or tax matters, which are governed by HMRC.

As for whether or not subs are refundable is down to the club's rules.  
In our case they are not refundable.

Cheers
Jill
NOT an Accountant!

On 25/05/2015 23:40, Mike or Penny Novack wrote:
>   I am NOT in the UK and so don't know your rules. But this is a case 
> where I'd THINK you'd need to refer to your bylaws and local 
> regulations. Answer the following question:
>
> If a member pays advance several years advance membership, what 
> happens if that member either quits the organization or dies before 
> the time is up?
>
> IF the advance payment gets refunded, then your treating it as a 
> liability is correct. If not, then I think it should all be current 
> income (and accounting for the fact that member shouldn't be dunned 
> for dues till some time in the future a matter of record keeping 
> having nothing to do with the books)
>
> Michael
>
>
>
>>
>>
>> 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
>>
>> Cheers
>> Jill
>>
>> 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]
>>>> <http:///user/SendEmail.jtp?type=node&node=4678408&i=0>>
>>>> Cylindric <[hidden email]
>>>> <http:///user/SendEmail.jtp?type=node&node=4678408&i=1>>
>>>>
>>>>> Hi folks. I'm sort of starting out with this sort of company, 
>>>>> which is
>>>>> a
>>>>> 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
>>>>> stuff,
>>>>> 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
>>>>> products
>>>>> 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
>>>> out"
>>>> 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.
>>>>
>>>> -- 
>>>> Wm...
>>>>
>>>
>


---
This email has been checked for viruses by Avast antivirus software.
http://www.avast.com



More information about the gnucash-user mailing list