[GNC] Ideas and recommendations for community project

[David Cousens]

Sebastian,

You do not have to account for the details of other entities (e.g. your members)
in accounting for contributions from members, In the eaxample you gave of a
member buying something for the community entity and being reimbursed, the
purchase by the member on behalf of the community creates a liability for the
community and a corresponding expense inthe communities account, so the purchase
would be treated as a credit to an appropriate liability account ( could be an
accounts payable account) and a debit to the appropriate expense account (or a
debit to an asset account if it was a long term asset from which the community
would derive future benefits). When the reimbursement is paid to the member, the
liability account is debited and the bank account is credited for the amount of
the reimbursement.

The accounting itself is pretty standard, with likely a few quirks where funds
may be restricted to specific purposes, but the details are going to depend
primarily on any legislation in your jurisdiction which covers the specific type
of entity and the reporting and accounting requirements imposed under that
legislation and the taxation legislation (county/city, state, federal/national)
that may have to be complied with  and then what accounting information you need
to effectively organize the community organization.

For example our state government in Australia imposes under legislation certain
specific minimal organizational and accounting requirements for clubs,
societies, community organizations etc which must be complied with. It would be
wise to get professioanl accounting advice on what is required in your
jurisdiction.

 David Cousens


On Mon, 2023-07-31 at 07:28 +0200, gibelium at gmx.net wrote:
> I have recently started using gnuCash and am trying to figure out if I
> can use gnuCash in a meaningful way to map the cash flows in a community
> project. I think I understand the basic concepts through the tutorial
> and with a test project, but am still looking for ideas and
> recommendations for some specific circumstances.
> 
> ## Membership fee
> The membership fee with which a member 'buys in' to the community is to
> be paid in by a certain date. With the contribution a member acquires
> shares in the community assets and buys a private plot of land. The
> total amount can be paid in full, flexibly with several installments or
> with monthly transfers.
> How do you map the community's outstanding claims against a member who
> has not yet paid the contribution in full?
> It would also be useful to have an overview of which payments are due
> from whom and when, so that payments received can be compared with them.
> Reports that show the current status of deposits for all members and
> list the deposits made for each member would certainly also be helpful.
> 
> ## Community assets & shares
> The community assets (land, machinery, buildings, etc.) are 'divided'
> proportionally among the members, i.e. each member 'owns' a certain
> share (1 / number of members) of the community assets. In the case of a
> company, this would be comparable to the shares of several shareholders,
> who (in this case) all own the same share in the company. In the case of
> a corporation, it would be shares owned by the investors.
> This is interesting for cases where the community generates income that
> can be paid out to the members, if necessary. How can this scenario be
> mapped in gnuCash and illustrated in reports?
> 
> ## System boundaries
> How to map cash flows between accounts inside and outside the system
> boundaries?
> An example: A member buys something for the community with his private
> cash (outside the system boundary). When the invoice is submitted, the
> amount is paid to the member from a community account (inside the system
> boundary). The member's cash account basically lives outside the system
> boundary and is not mapped into gnuCash, right? How does such a scenario
> work in double-entry accounting?
> 
> Many thanks for the help and recommendations,
> Sebastian
> 
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