[GNC] Bookkeeping for a club's charity account - use business features?

[Michael Hendry]

> On 27 Aug 2019, at 13:24, Mike or Penny Novack <stepbystepfarm at comcast.net> wrote:
> 
> On 8/27/2019 2:40 AM, Michael Hendry wrote:
> 
>> I had understood from a recent response from Mike Novack that using an accrual-basis system for cash-basis organisation would be wrong.
> "Wrong" is the wrong term. I did not say that. I said that adjustments might have to be made (the books kept on accrual basis but the reports had to reflect cash basis). That calls for more than a little bookkeeping experience to do correctly.

Apologies for misquoting you. I’ve extracted part of the exchange (between asterisks):

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> On 25 Aug 2019, at 15:55, Mike or Penny Novack <stepbystepfarm at comcast.net> wrote:
> 
> On 8/25/2019 3:25 AM, Michael Hendry wrote:
> 
> First (and an important question)
>   Is your organization om the cash or accrual basis? You should always state that.

Cash.

> The business features of gnucash only work for accrual.
***

…which I mistakenly took to mean I could only use the business features if I were accounting on an accrual basis.


> 
> Back to the suggestion of not posting invoices immediately, that would be correct for memberships/dues (which are not legally receivable) but you could post pledges (which are --once a pledge is made the person owes that amount to the organization). Not that I only know this true for the US.
> 
> The other thing mentioned, RESTRICTED donations (the donor has earmarked for a set purpose) introduces the need for more record keeping. The treasurer has to track when the organization has "earned" that donation << the restriction removed because that amount has been spent for the designated purpose >>

Yes, we’d already discussed this a couple of years ago in another context, and you had suggested using a Liabilities account to keep track of such restricted funds. The accountant who examined those accounts prior to their submission to OSCR advised that this wasn’t the proper way to handle restricted funds in a UK context, and that the administrator would have to keep an eye on (e.g.) bursaries awarded through donations restricted for this purpose.

> 
> Michael D Novack

Regards,

Michael