Another fee question

Paul Bleicher on

Just getting the hang of being treasurer. Let's say we
institute a penalty fee for a late payment. John Doe is
late with a payment and we charge him $20. He writes a
check and it is recorded as a fee into the Brokerage account
(and is deposited there)

All well and good.

NOW, say the club wants to automatically charge John this
money for his late check without demanding an extra payment.
How do you do this? Is there a way to reduce the number of
units in his brokerage account to pay the fee?

Would it be different if it was a bounced check which was an
expense to the club?

Rip West on

NOW, say the club wants to automatically charge John this money for his late check without demanding an extra payment. How do you do this? Is there a way to reduce the number of units in his brokerage account to pay the fee?
>>

Sure, just do a partial withdrawal for the amount involved.

Would it be different if it was a bounced check which was an expense to the club?

Say that a member's monthly payment check bounced. Then you have two separate problems. First, you must record the fact that the actual amount credited by the bank was less than you previously entered. Do this by entering a negative payment for the member. Then you must record the amount charged by the bank as a NSF [non sufficient funds] charged. Enter this as an expense, using the suspense account, and then fund such expense by making a partial withdrawal from the member, again using the suspense account.

Rip West
Saint Paul, MN

Gene Rooks on

Rip, in all due respect, a far easier way to deduct a late charge from a payment without assessing extra money from the member would be to break up the deposit, say $100 regular payment, paid late, would be applied $80 payment, $20 fee. Though this wasn't asked, for my two cents, late charges are something I believe a club could do without. You can maintain a requirement for a specified minimum amount to be paid within a year, preferably monthly, but we are adults, not kids.

On the bounced check charge, your advice to enter a negative payment is fine for the amount of the bounced check. But for the additional bounced check charge by the bank, while you would first enter this as an expense, funding it by a partial withdrawal from the member seems cumbersome to me. It would be better to either collect separately from the member and post it as a fee, or on his next regular payment, treat as in the paragraph above, out of a normal $100, apply $75 payment, $25 fee, assuming the bounced check charge was $25.

Gene Rooks, Orlando

Rip West on

<<
Rip, in all due respect, a far easier way to deduct a late charge from a
payment without assessing extra money from the member would be to break up
the deposit, say $100 regular payment, paid late, would be applied $80
payment, $20 fee.
>>

Well, that certainly works, but I can't see that it's 'far easier'.

<<
It would be better to either collect separately from the member and post it
as a fee
>>

But the user specifically asked for a method other than collecting
separately.

Rip West
Saint Paul, MN

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