Ira,

Thanks for the reply.  Could you give me some examples of
when there is a need for the suspense account.  I have been
keeping club books with IClub for years.  The only time I
can remember using the suspense account was to facilitate
the payment of a withdrawing member.

I am sure there are other uses that would make my
bookkeeping more simple...I just don't know what they are
<grin>

I have used a Suspense account as a generic holding bin for transactions in progress which take more than a few days to complete. We have had months where member deposits were delayed. TDWaterhouse/Ameritrade has a long hold on deposits before you can write checks against them, so often when we have an expense we'll write the check at the meeting but delay mailing/cashing it for 2-3 weeks while we wait for the funds to become available. Some NJ clubs have/had partnership filing fees which were refunded by the state. It often took months to receive the refund after the paperwork was submitted. None of the above "require" the use of a suspense account as each of them really just involve outstanding transactions and can be reconciled just as a bank statement would be.

 

The one situation (other than member withdrawals) where a suspense account is "necessary" is in the case of mutual fund/REIT distributions which are made in January but are taxable in the preceding year. In that case, you need to record the dividend in December to get it into the tax return, but you don't want to record the cash receipt until January.

 

Ira Smilovitz