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Bookkeeping 101 for Genealogical Societies - FGS Wiki

Bookkeeping 101 for Genealogical Societies


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[[Category:Strategies for Treasurers]]
 
[[Category:Strategies for Treasurers]]
 +
 +
Setting up an accounting system which meets the
 +
needs of your society and the requirements for
 +
federal reporting, need not be overwhelming. With a
 +
little organization you can whiz through the process.
 +
It is important to keep in mind that your society is a
 +
business, and if it has been granted nonprofit status
 +
you are required to provide financial information
 +
to the public upon request. The IRS suggests that
 +
one easy way to meet this requirement is to post a
 +
copy of your completed 990 return or your year-end
 +
financial statement on your society web site.
 +
 +
 +
== Reporting ==
 +
 +
A society board cannot make informed decisions
 +
on future spending without having an adequate
 +
understanding of current financial status. Reports
 +
should be prepared for every board meeting and
 +
in between meetings as needed. The basic reports
 +
needed for a society to function efficiently include:
 +
<ol>
 +
<li>'''Statement of Financial Position [Balance Sheet]-''' This report shows the balances in bank accounts,
 +
the value of equipment and books, prepaid income,
 +
amounts owed in credit card charges, unpaid bills
 +
and loans as well as the equity position of the
 +
society.
 +
<li>'''Statement of Financial Income & Expense -''' [Profit and Loss] This report shows all income and
 +
expenses during the period being reported on. A second column for year to date is helpful for seeing
 +
the entire picture.
 +
<li>'''Budget vs. Actual -''' This report is a useful tool in
 +
assessing your position throughout the year. Most
 +
computer programs will create additional columns
 +
for percent of budget spent and actual amount over
 +
and under budget.
 +
<li>'''Ledgers -''' Ledger reports provide itemization of
 +
any particular account as needed. This can be a bank
 +
account, an asset account [inventory, books] income
 +
account or an expense account. [A seminar chair might
 +
want a list of all paid attendees, a newsletter editor a list of all
 +
payments made for newsletter production.]
 +
</ol>
 +
 +
== Compiling Information for Reports ==
 +
 +
While books can be kept by hand in a ledger book,
 +
in this computer age your society should seriously
 +
consider buying a good bookkeeping program.
 +
There are many advantages including: continuity in
 +
bookkeeping method, the ability to create historic
 +
reports, the ability to set up an audit trail, and much
 +
more.
 +
 +
There are many user-friendly bookkeeping programs
 +
available on the market. It is highly recommend that you
 +
get one that is able to prepare the types of reports
 +
mentioned above.
 +
In selecting a program look for one that allows you
 +
to:
 +
<ul>
 +
<li>Set up and monitor budgets.
 +
<li>Provide a true Statement of Financial Position
 +
[Balance Sheet].
 +
<li>Use “classes.” This feature makes it possible
 +
to track specific program income and expense
 +
without having duplicate accounts for each
 +
activity.
 +
</ul>
 +
 +
Backup your files regularly. Make sure that other
 +
society members have a copy of the file or backup.
 +
If the society has an office computer, the program
 +
should be loaded on it and the data updated on a
 +
regular basis.
 +
 +
If you are keeping books by hand, you should total
 +
columns at the end of each month or keep running balances of amounts in various accounts. Be sure
 +
that you have backup records in case something
 +
happens to the originals.
 +
 +
 +
== Organizing Your Paperwork ==
 +
 +
Set up a system – Create a File Box with sections
 +
for receipts, deposits, bank statements, cancelled
 +
checks.
 +
 +
If you are unable to continue as treasurer, will the
 +
society be able to easily retrieve all records? If the
 +
society has an office, consider filing there rather than
 +
keeping the records in your house.
 +
 +
Creating a good filing system will make it easier
 +
to provide the records for an audit at the end of the
 +
year.
 +
<ul>
 +
<li>Deposits – attach bank receipt to list of deposited
 +
checks.
 +
<li>Paid bills - attach a check voucher or
 +
write check number and date paid on each.
 +
If you are reimbursing a member for out-of-
 +
pocket expenses, use an expense voucher.
 +
<li>Bank Statements should be reconciled as they
 +
are received. Attach computer reconciliation or
 +
write the date reconciled on statement.
 +
<li>Keep the returned checks in numerical order in a
 +
separate section.
 +
</ul>
 +
 +
It is acceptable to scan bills and deposit slips and
 +
discard the paperwork. Keep the scanned files organized on your computer,
 +
back up regularly, and provide a copy to at least one
 +
other society member before you discard paper.
 +
 +
 +
== Taxes and Other Government Reports ==
 +
 +
Do you need to file tax returns? This depends on the status of your organization,
 +
which state you live in, the amount of money you
 +
collect in a year (not your profit) and whether you
 +
sell items.
 +
<ol>
 +
<li>'''Status -''' Are you nonprofit? Has the status
 +
been approved by the IRS and any state Series Set IV Number 5 Page 3
 +
Bookkeeping 101 for Genealogical Societies
 +
taxing board? If your gross proceeds are
 +
less than $5000 per year you do not need
 +
to file a 1023 with the Internal Revenue
 +
Service, but you do need to meet the
 +
criterion established by the government
 +
and be able to produce your records if they
 +
ask. If your society does not have nonprofit
 +
status, you will need to file the appropriate
 +
forms for an organization or corporation
 +
each year regardless of the amount of
 +
money earned.
 +
<li>'''Federal Tax Returns –''' Starting in 2008
 +
nonprofit organizations are required to
 +
file an annual informational return with
 +
the IRS. For most societies (those with an
 +
income under $25,000) the return is in the
 +
form of an e-postcard that just verifies the
 +
organization is still in existence. Those
 +
societies with income over $25,000 are
 +
required to file a 990 or a 990EZ. In determining which form an organization
 +
needs to file, it is important to remember
 +
that this is gross income and all doations to
 +
the organization need to be included.
 +
For more on IRS filing requirements and to
 +
access a library of useful publications and
 +
presentation materials, visit the IRS website
 +
at http://www.irs.gov and click on the nonprofit
 +
link.
 +
<li>'''State Tax Returns –''' Each state will have
 +
its own filing requirements. The state of
 +
California has an informational return
 +
which must be filed each year with a
 +
small fee (although the fee is waived
 +
for nonprofit organizations with normal
 +
receipts less than $5,000). Some states do
 +
not have any income tax but they might
 +
have a Corporate informational form even
 +
so. The IRS website provides links to state
 +
taxing boards.
 +
<li>'''Sales Tax -''' If your society sells items in a state that
 +
collects sales tax you need to apply to the
 +
taxing agency for a sales tax number. You
 +
will need to file a tax form periodically, with
 +
which you will submit collected taxes.
 +
</ol>
 +
 +
 +
== The Treasurer’s Book ==
 +
 +
With volunteer jobs, we often find ourselves
 +
rewriting the book. Don’t you wish that someone
 +
had made your job easy by creating a book that told
 +
you exactly what you needed to know?
 +
Be that “someone” for the person who will take
 +
over the job from you. A good treasurer’s book
 +
should contain the following:
 +
<ul>
 +
<li>A job description specific to your organization.
 +
What is the treasurer expected to do? Include
 +
items from the bylaws, the standing rules and
 +
the policies of your organization that apply to
 +
the treasurer’s job.
 +
<li>A fact sheet with:
 +
<ul>
 +
<li>Federal EIN number.
 +
<li>State corporation or other identification numbers.
 +
<li>Sales Tax number.
 +
<li>List of Bank accounts with all banking information and online access codes.
 +
<li>Insurance policies.
 +
<li>Include any other pertinent numbers such as membership numbers in other organizations.
 +
</ul>
 +
<li>A job calendar listing what needs to be done and when.
 +
<li>Recurring bills that need to be paid.
 +
<li> Specific items for current contracts or activities that are not paid immediately upon receipt.
 +
<li>Dues that need to be paid to other societies.
 +
<li>Publication renewals.
 +
<li>Reports that need to be filed.
 +
<li>Tasks that need to be performed in a timely manner. For example, sending out dues notices or paying a contribution to the a specific annual charitable fund.
 +
<li>Sections that hold copies of your nonprofit filings, prior year Profit & Loss and tax returns, copies of your insurance policies and other records normally associated with the financial picture of a
 +
society.
 +
</ul>
 +
 +
The treasurer’s book need not be paper. It could be on a CD or the secure section of a website.
 +
 +
 +
== Audit ==
 +
 +
Every society should have an audit of the books at the
 +
end of each fiscal year. The board should set an audit
 +
schedule. The audit can be internal or external. The
 +
treasurer should provide all needed reports and copies
 +
of all paperwork in a timely manner.

Latest revision as of 00:02, 14 August 2013

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