Scout Troop Account Structure & Invoice Procedure for Dues
jdunham
jwdunham at gmail.com
Mon Apr 4 03:53:10 EDT 2016
David knows a lot more than I do, but I think we were on similar tracks.
However I am guessing that the whole reason for scout accounts is so that
you don't have to refund overpayments right away, since the charges are
frequent. Modifying David's standard method, rather than treat overpayments
as an income you could apply the extra dollar in the payment to
Liabilities:Scout Account - Nick.
The only problem with that is that it is hard to generate a coherent
statement when Nick's parents ask you for a statement of their charges and
payments. If you transfer all charges and payments as debits or credits to
"Liabilities:Scout Account - Nick", then you can easily make a useful report
by running an Gnucash Account Report on that scout account. There is the
Gnucash Customer Report but that needed a lot of tweaking before I could get
something that wouldn't be terribly confusing to the parents.
What I am planning to do is giving up on the business features (invoicing
and A/R) and running all transactions through the scout family's liability
account, and then periodically print that Account Report out as a PDF and
emailing it to the scout families. Every payment received is a transfer
between the scout liability account and Assets:Undeposited Checks or
Assets:Cash on Hand, and every charge for an activity is a transfer between
some income account (I make a separate one for each activity/event) and the
liability account.
I am not an accountant, but I think the above system should be clear enough
to an auditor without generating a flurry of invoices and accounting journal
transfers that confuse your families. In addition it is very important to
come up with a system that is simple enough for the next treasurer to use if
your troop is not lucky enough to have an accountant parent when after you
are ready to pass the torch.
Hope that helps,
Jason
DaveC49 wrote
> Hi Joshua,
> I think you have the steps reversed.
> Step 1.Your treasurer should create and post in the accountsinvoices for
> the Membership Assessment and then mail/give copies of them to the
> parents. Each invoice when posted to the accounts creates a debit entry
> in your 1100 Accounts Receivable account ( money owed to your troop) and
> will also create a credit entry in an Income/revenue account ( this may be
> your 2100 Scount Account Nick ) but if your books have to be audited then
> it would be better to name it Income:Membership Assessment where
> Membership Assessment is a sub account of the top level Income Account (
> Gnucash should create top level accounts labelled Assets,
> Liabilities,Equity, Income and Expenses by default. These are the normal
> headings for a balance sheet and you may create any subaccounts using
> these as parent accounts. Gnucash will then total the subaccounts into
> the parent accounts). Your Checking account and Accounts Receivable are
> Asset accounts. You can create additional income sub accounts to cover
> income from fund raising activities or any other activities your troop
> might carry out.
>
> 2. When your treasurer receives payments from the parents, he issues them
> with a receipt and records the payment against the appropriate invoice
> using the Business>ProcessPayments menu item or if he has the invoice
> displayed, the Business>Pay Invoice menu item. If you create another
> asset account Undeposited Funds he should create a transaction with adebit
> entry to this account for the amount of the payment and a credit entry in
> the Accounts Receivable account associated with the invoice you have paid.
>
> 3.When he deposits the funds in the bank account he creates a transaction
> where the checking account is debited (increased) by the amount deposited
> and the Undeposited Funds is credited by the amount deposited. (It is
> possible to debit the Checking account and credit the Accounts Receivable
> directly in paying the invoice but generally not desirable as you then
> have no record of funds collected but not yet deposited in the account and
> if your treasurer forgets to pay money in there is a reminder for him when
> the balance of the Undeposited Funds account does not return to zero when
> the money is deposited).
>
> When you spend money from the Checking account, you create a transaction
> which credits( decreases the balance) your Checking account by the amount
> spent and debits (increases the balance) an Expense account. Similarly to
> the Income account Expenses is a header account and you can create sub
> accounts for specific categories of expenditure (Equipment, Travel etc) as
> required.
>
> Now to deal with your over payment. If you enter the check amount as the
> payment ($25), by default Gnucash will try and put all of this as a credit
> against the Accounts Receivable. If you do this and open the split for the
> transaction from the checking Account you will see two associated entries
> to the Accounts Receivable on the lines which open up - one for $24 for
> payment of the invoice and one for $1 for the over payment. You could also
> look at this transaction from Accounts Receivable. Here you will see an
> Invoice (I in the column labelled T) entry with a debit of $24 recording
> the posting of your invoice and two payment (P in the column labelled T)
> entries one for $24 and the other for $1. If you open either of these
> (click on them) they will show that your checking Account is debited by
> $25 and two entries with a credit to your accounts receivable for $24 and
> $1by the payment transaction with the over payment.
> At this point you need to create an Income subaccount Overpayments. If
> you then click on the Assets:Accounts Receivable line for $1 (from either
> the Checking Account or Accounts Receivable you will get a symbol which
> looks like a rounded sqare with a minus sign in it which will open up a
> list of your accounts if you click on it locate the newly created
> Income:Overpayments account in that list and select it. The lines of the
> split of the transaction should now read something like:
> Debit Credit
>
> Assets:CheckingAccount $25
>
> Assets:Accounts Receivable
> $24
>
> Income:Overpayments
> $1
> .
>
> At this point you need a policy decision on handling overpayments. If
> you wish to refund overpayments to the the parents then when you give the
> money back to them you would create a transaction in which you credit your
> Checking account (by $1 in this case) and debit the Income:Overpayments
> account (again by $1 in this case). Your parents may say don't worry its
> a donation. In this case you could create an Income sub account
> Income:Donations and the transaction recording this would be a
> debit(of$1) to the Income:Overpayments and a credit of $1 to
> Income:Donations. It may be simpler to consider that all overpayments are
> donations but if a parent were to demand an overpayment back you might
> have to explain to an auditor how a donation went missing. ( not a huge
> problem for the odd $1 but if it was a significant amount you might have
> problems).
>
> Where I live community groups like scout groups are required to obey
> certain rules and accounting procedures and if they have assets over a
> certain amount, they are required to have an accounting firm audit their
> books) which is why the emphasis on recording the various phases of
> receiving and depositing money in detail.
> I would start with a basic chart of accounts as follows. The numbering is
> less critical than setting the account type when you edit or create
> accounts:
>
> 1000 Assets (top level account -placeholder only)
> 1010 Assets:Checking Account
> 1020 Assets:PettyCash (if your treasurer operates a petty cash tin for
> small payments)
> 1200 Assets: Accounts Receivable
>
> 2000 Liabilities again a top level placeholder account)
> 2100 Liablities: Accounts Payable ( if you purchase items for the
> troop on credit or receive invoices from vendors)
> 2200 Liabilities :Loans (if you borrowed money for
> a project for example- otherwise leave out)
>
> 3000 Equity:
> 3010 Equity:Retained earnings (see tutorials for closing income and
> expense accounts to equity at EOY )
>
> 4000 Income ( top level placeholder)
> 4010 Income:Membership Assessments
> 4020 Income:Overpayments
> 4030 Income:Donations
>
> + other income categories for fund raising
>
> 6000 Expenses: (again top level placeholder)
> 6010:Expenses: Hall hire + any additional categories which may be
> appropriate
>
> There is a standard account numbering used in businesses (see
> http://strategiccfo.com/wikicfo/standard-chart-of-accounts/ for an
> overkill example but this is a convention and unless it is a legislative
> requirement you can just run with the Assets, Liabilities, Equity, Income
> and Expense as the names of your top level accounts and forget the
> numbers. If you reach the stage where your scout group has investments
> and loans or considerable assets, find a parent who is an accountant and
> coerce them into the treasurer position.
>
> The other bit of required reading is to have a basic undersatnding of
> double entry accounting ( when I mentioned transaction above they had at
> least two components a debit to one account and a credit to another
> account and the sum of the debits for a transaction must equal the sum of
> the credit) , e.g the overpayment case above) and the specialized use of
> the terms debit and credit. The Wikipedia entry for double entry
> accounting is fairly good and easy to read and is a good basic
> introduction. If you then go to the tutorials and user guides they may
> make a bit more sense.
>
> Good luck
>
> David Cousens
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