Hi All!
Would be grateful to hear from others what the best way is
for a stock club to pay for the Bivio subscription. Grateful
to anyone who responds to this. Thanks so much!

Carol

Carol,

> Would be grateful to hear from others what the best way
> is for a stock club to pay for the Bivio subscription.

If you're asking about the mechanics of paying for the bivio subscription, here's how my club does it.

The treasurer (it could be a different club member) pays the subscription using their personal credit card. Then the following two transactions are entered into bivio. The first transaction records the bivio subscription as a club expense. The second transaction reimburses the member who paid for the subscription with club units equal in value to what they paid with their credit card. Note the use of the "suspense" account with both transactions (the two transactions net out to zero, leaving the suspense account balance unchanged).

(1) Accounts -> Expense

  Account: Suspense
  Transaction Date: date of the credit card payment
  Amount: bivio subscription cost
  Category: "bivio Subscription"
  Allocate Equally Among Members: No (do not check the box)
  Remark: "Treasurer paid with personal credit card."

(2) Members -> Payment(s)

  Transaction Date: date of the credit card payment
  Member Valuation Date: same as Transaction Date
  Account: Suspense
  Default Remark: "Reimbursement for bivio subscription paid with personal credit card."
  Amount: bivio subscription cost entered for treasurer, all others zero.

-Jim Thomas


      

So how does that end up that everyone is paying for the
bivio $99? I understand I write the check personally, then
since I have more than 20% ownership in the club, I won't
pay for 3 months, and in the 4th month I'll pay $21.05 . So
there I've been reimbursed the $99.

But this has nothing to do with the other members; how does
it involve them? It just doesn't make sense, and I have to
explain it to my club.

Thanks for the detailed replies and procedure.
Carol
Treasurer, The Stockettes

Jim Thomas wrote:
> Carol,
>
> > Would be grateful to hear from others what the best way
> > is for a stock club to pay for the Bivio subscription.
>
> If you're asking about the mechanics of paying for the bivio subscription, here's how my club does it.
>
> The treasurer (it could be a different club member) pays the subscription using their personal credit card. Then the following two transactions are entered into bivio. The first transaction records the bivio subscription as a club expense. The second transaction reimburses the member who paid for the subscription with club units equal in value to what they paid with their credit card. Note the use of the "suspense" account with both transactions (the two transactions net out to zero, leaving the suspense account balance unchanged).
>
> (1) Accounts -> Expense
>
> Account: Suspense
> Transaction Date: date of the credit card payment
> Amount: bivio subscription cost
> Category: "bivio Subscription"
> Allocate Equally Among Members: No (do not check the box)
> Remark: "Treasurer paid with personal credit card."
>
> (2) Members -> Payment(s)
>
> Transaction Date: date of the credit card payment
> Member Valuation Date: same as Transaction Date
> Account: Suspense
> Default Remark: "Reimbursement for bivio subscription paid with personal credit card."
> Amount: bivio subscription cost entered for treasurer, all others zero.
>
> -Jim Thomas
>
>
>

Carol,
As our club treasure I use my personnal credit card to pay
Bivio then the club reimburses me from the club bank
account. It is recorded as an expense in the Bivio
accounting so that all the members are credited with their
portion of the expense at tax time.
Bob Davenport


Carol Solomon wrote:
> Hi All!
> Would be grateful to hear from others what the best way is
> for a stock club to pay for the Bivio subscription. Grateful
> to anyone who responds to this. Thanks so much!
>
> Carol

Hello All.

The transactions described by Jim Thomas and Robert
Davenport are the very easiest way to handle the accounting
for your bivio subscription.

Etana Finkler wrote:
> So how does that end up that everyone is paying for the
> bivio $99?

It may help to think of it as two separate things. First,
the $99 expense, like all club income and expenses, gets
passed-through to the members via their K-1s at tax time.

Second, the member who pays that $99 on their own credit
card has effectively invested an extra $99 bucks in the club
above and beyond their regular contributions. By entering
the member payment, they get appropriately credited with
units for that extra investment.


> I understand I write the check personally, then
> since I have more than 20% ownership in the club, I won't
> pay for 3 months, and in the 4th month I'll pay $21.05 . So
> there I've been reimbursed the $99.

These steps are completely unnecessary. Just enter one
payment in the amount of the $99 at the time it was paid.

Hope that helps.
Eric Dobbs
bivio Software, Inc.

Eric and all,
Okay, so it is a club expense for taxes, but how has each
member paid proportionately. I'm asking AGAIN for
Carol/treasurer, since we have to explain it to the club
Tuesday, and I still do not understand.

For taxes it is an expense proportionate to units
Do member get deducted units that get identified as expense?

I cannot take the $99 as extra additional units, since I am
WAY WAY over in my units already. I do not want the extra
units. I have about 25% of the club units now, since we have
3 orig members and 3 new members. So I will not pay dues for
3 months to take care of that. I understand that.

I do not understand beyond taxes, how the club members have
paid for this fee: is it taken from their units?

I pay bivio
I don't pay the club for 3 months
So then I have less units than I would normally have
So then the club member have more (proportionately) than if
I had been paying those 3 months

It just confounds me.

thanks for patiently explaining how the other members share
this cost.
Etana and Carol
Stockettes
>
> Etana Finkler wrote:
> > So how does that end up that everyone is paying for the
> > bivio $99?
>
> It may help to think of it as two separate things. First,
> the $99 expense, like all club income and expenses, gets
> passed-through to the members via their K-1s at tax time.
>
> Second, the member who pays that $99 on their own credit
> card has effectively invested an extra $99 bucks in the club
> above and beyond their regular contributions. By entering
> the member payment, they get appropriately credited with
> units for that extra investment.
>
>
> > I understand I write the check personally, then
> > since I have more than 20% ownership in the club, I won't
> > pay for 3 months, and in the 4th month I'll pay $21.05 . So
> > there I've been reimbursed the $99.
>
> These steps are completely unnecessary. Just enter one
> payment in the amount of the $99 at the time it was paid.
>
> Hope that helps.
> Eric Dobbs
> bivio Software, Inc.

Etana,
What Eric explained was two different types of transactions.
The type you don't want to do is the second one he explained
in which a member is credited with the payment for Bivio.

Instead just have it as an expense for the club and have the
club pay the $99. You as the credit card holder are just a
middle man for the payment to Bivio. Without your credit
card it is the club sending a check to Bivio. This, anyway,
is the way I handle it. Because it is an expense than all
members will have units deducted at the end of the year
equal to her portion of the club.
Bob


Etana Finkler wrote:
> Eric and all,
> Okay, so it is a club expense for taxes, but how has each
> member paid proportionately. I'm asking AGAIN for
> Carol/treasurer, since we have to explain it to the club
> Tuesday, and I still do not understand.
>
> For taxes it is an expense proportionate to units
> Do member get deducted units that get identified as expense?
>
> I cannot take the $99 as extra additional units, since I am
> WAY WAY over in my units already. I do not want the extra
> units. I have about 25% of the club units now, since we have
> 3 orig members and 3 new members. So I will not pay dues for
> 3 months to take care of that. I understand that.
>
> I do not understand beyond taxes, how the club members have
> paid for this fee: is it taken from their units?
>
> I pay bivio
> I don't pay the club for 3 months
> So then I have less units than I would normally have
> So then the club member have more (proportionately) than if
> I had been paying those 3 months
>
> It just confounds me.
>
> thanks for patiently explaining how the other members share
> this cost.
> Etana and Carol
> Stockettes
> >
> > Etana Finkler wrote:
> > > So how does that end up that everyone is paying for the
> > > bivio $99?
> >
> > It may help to think of it as two separate things. First,
> > the $99 expense, like all club income and expenses, gets
> > passed-through to the members via their K-1s at tax time.
> >
> > Second, the member who pays that $99 on their own credit
> > card has effectively invested an extra $99 bucks in the club
> > above and beyond their regular contributions. By entering
> > the member payment, they get appropriately credited with
> > units for that extra investment.
> >
> >
> > > I understand I write the check personally, then
> > > since I have more than 20% ownership in the club, I won't
> > > pay for 3 months, and in the 4th month I'll pay $21.05 . So
> > > there I've been reimbursed the $99.
> >
> > These steps are completely unnecessary. Just enter one
> > payment in the amount of the $99 at the time it was paid.
> >
> > Hope that helps.
> > Eric Dobbs
> > bivio Software, Inc.

Etana:

I don't think I can improve on the complete answers provided
by the previous responders to your questions, but let me
give it a try.

When your club pays the Bivio service, the net worth of the
club is reduced by the amount paid for Bivio. This effect
occurs whether you write a check payable to Bivio on the
club's checking account, the club writes you a check to
reimburses you, or use the posting to the suspense account
method. The reduction of the net worth of the total club
assets reduces the value of each unit. As the value of each
unit decreases, the overall value of each member's interest
in the club is decreased in proportion to that member's
number of units.

As to your second concern about having fewer number of units
if you don't make a capital contribution for three months.
What you seem to be missing is the fact that you will
acquire additional units immediately in return for your
payment of the $99 to Bivio. By not making any further
capital contributions for three months simply means that you
won't acquire even more units on top of the one you get for
the $99 for the Bivio reimbursment. It would be the same
result as if another club member simply paid $99 now and
then did not make further payments for the next three
months. Whether at the end of three months you have more or
less units than if you paid the capital contributions
monthly depends on whether the overall value of your club's
net value goes up or down during the following months.

If you are still confused, perhaps it would be simplier to
have the club write you a check to reimburse you for the $99
payment to Bivio and you can continue to make your capital
contributions monthly as you would normally.

I hope this helps.

Jack Ranby


Etana Finkler wrote:
> Eric and all,
> Okay, so it is a club expense for taxes, but how has each
> member paid proportionately. I'm asking AGAIN for
> Carol/treasurer, since we have to explain it to the club
> Tuesday, and I still do not understand.
>
> For taxes it is an expense proportionate to units
> Do member get deducted units that get identified as expense?
>
> I cannot take the $99 as extra additional units, since I am
> WAY WAY over in my units already. I do not want the extra
> units. I have about 25% of the club units now, since we have
> 3 orig members and 3 new members. So I will not pay dues for
> 3 months to take care of that. I understand that.
>
> I do not understand beyond taxes, how the club members have
> paid for this fee: is it taken from their units?
>
> I pay bivio
> I don't pay the club for 3 months
> So then I have less units than I would normally have
> So then the club member have more (proportionately) than if
> I had been paying those 3 months
>
> It just confounds me.
>
> thanks for patiently explaining how the other members share
> this cost.
> Etana and Carol
> Stockettes
> >
> > Etana Finkler wrote:
> > > So how does that end up that everyone is paying for the
> > > bivio $99?
> >
> > It may help to think of it as two separate things. First,
> > the $99 expense, like all club income and expenses, gets
> > passed-through to the members via their K-1s at tax time.
> >
> > Second, the member who pays that $99 on their own credit
> > card has effectively invested an extra $99 bucks in the club
> > above and beyond their regular contributions. By entering
> > the member payment, they get appropriately credited with
> > units for that extra investment.
> >
> >
> > > I understand I write the check personally, then
> > > since I have more than 20% ownership in the club, I won't
> > > pay for 3 months, and in the 4th month I'll pay $21.05 . So
> > > there I've been reimbursed the $99.
> >
> > These steps are completely unnecessary. Just enter one
> > payment in the amount of the $99 at the time it was paid.
> >
> > Hope that helps.
> > Eric Dobbs
> > bivio Software, Inc.

Etana,

> Okay, so it is a club expense for taxes,
> but how has each member paid
> proportionately.

That's what happens anytime you record an Expense
transaction. The expense gets allocated among all the
members for tax purposs, using the method (either equally or
proportionately) that you choose as part of entering the
expense transaction). There is nothing different in this
regard about the expense to pay for the bivio subscrption
than anything else you enter as a club expense.


> For taxes it is an expense proportionate
> to units. Do member get deducted units
> that get identified as expense?

The allocation of expenses for tax purposes has nothing to
do with units. Expenses don't change the number of club
units.


> I cannot take the $99 as extra additional
> units, since I am WAY WAY over in my
> units already. I do not want the extra units.

If you paid the expense using your credit card, you need to
get reimbursed by the club in some way. You can be
reimbursed either with additional units or by check. If the
club doesn't mind reimbursing you by check, then the
treasurer can enter an expense transaction for the bivio
subscription but make the check out to you (since you have
already paid bivio on behalf of the club).

Getting reimbursed with units (instead of by check) is
mostly just a way to save the club the trouble of writing a
check. To do that, *both* transactions I described before
need to be entered (the bivio subscription expense
transaction *and* the member payment transaction, both using
the suspense account). If you like, you can consider the
$99 reimbursement an early payment of dues and, so, you can
skip making $99 worth of payments over the next few months,
that's fine. The only reason you'd do that is to avoid
accumulating more units that you want to have (which seems
to be situation in you rcase).


> I do not understand beyond taxes,
> how the club members have paid
> for this fee: is it taken from their units?

$99 has been removed from the club and the unit value has
been reduced. That's the whole purpose of an expense
transaction. The *number* of units hasn't changed, but the
total value of the clib is $99 less so each unit is also
worth less.


> I pay bivio. I don't pay the club for
> 3 months. So then I have less units
> than I would normally have. So then
> the club member have more
> (proportionately) than if I had been
> paying those 3 months

NO!!! What you describe above does not reimburse you for
the $99 you paid to bivio on behalf of the club. To be
reimbursed, you either need to get a check from the club for
$99, or you need to get $99 worth of units.

-Jim Thomas

Etana Finkler wrote:
> Okay, so it is a club expense for taxes, but how has each
> member paid proportionately.

It's important to understand that a "club expense for taxes"
is the same thing as an expense for each of the members.
There's no difference here between each member's value in
the club and the "for taxes" part.

Here's a simple and hopefully clear example.

Imagine a brand new club with five members. Each paid $100,
so the initial club value is $500. The first expense was
$100. After the expense the total value of the club is only
$400. The member status report will show each member's
value at $80 ($400 total value / 5 members with equal
shares). In effect, this "club expense" was passed through
to the members at $20 each.

Expenses reduce the total value of the club. Each member
pays for the expenses because the units in the club are now
worth less.


> Do member get deducted units that get identified as expense?

Units don't change at all, but the *value* of those units is
now lower.


> I cannot take the $99 as extra additional units, since I am
> WAY WAY over in my units already. I do not want the extra
> units. I have about 25% of the club units now, since we have
> 3 orig members and 3 new members. So I will not pay dues for
> 3 months to take care of that. I understand that.

This is a completely separate issue from the technique of
paying for club expenses that we've been talking about. I
understand that your club wants to keep the units between
the members from getting too far apart.

One way to do that would be to have one of the other members
pay for the subscription with their credit card and credit
them with units accordingly.

Here's another way to think about it. Instead of having the
treasurer write checks to reimburse members for club
expenses, the club is reimbursing with units. If you want
to keep the club's units equal over time, you can have the
member with the fewest units pay for the next expense.

Eric Dobbs
bivio Inc.

Jim - I have been the treasurer for our club since its
inception in 1995. I have never gone through this process
to record a reimbursement to me for payment of Bivio etc. I
have always just shown the check as an expense to be
allocated to the club members equally and noted that it was
for reimbursement of Bivio. Is this going to be a problem
in our accounting?

> > (1) Accounts -> Expense
> >
> > Account: Suspense
> > Transaction Date: date of the credit card payment
> > Amount: bivio subscription cost
> > Category: "bivio Subscription"
> > Allocate Equally Among Members: No (do not check the box)
> > Remark: "Treasurer paid with personal credit card."
> >
> > (2) Members -> Payment(s)
> >
> > Transaction Date: date of the credit card payment
> > Member Valuation Date: same as Transaction Date
> > Account: Suspense
> > Default Remark: "Reimbursement for bivio subscription paid with personal credit card."
> > Amount: bivio subscription cost entered for treasurer, all others zero.
> >
> > -Jim Thomas
> >
> >
> >

Henri,

There is no problem with what you have done.

Whether to allocate the bivio subscription expense (or any other expense) among the members equally or proportionately is a policy decision for the club. Some people have strong opinions about which way is best in certain situations, but there is no right or wrong answer way.

My personal opinion is that it's appropriate to allocate the bivio subscription expense proportionately (the more money you have invested the more you should contribute to basic operating expenses, just like you do in a mutual fund). But that's not "right" or "wrong", it's just what makes sense to me. Be aware that, technically, the IRS requires that a partnership allocate all expenses proportionately unless the partnership agreement is very specific about stating otherwise. In any case, you certainly don't want to go back and change what has already been done in a prior tax year.

This is completely separate from the issue of whether you reimburse a member by check or in units for an expense they paid on behalf of the club. Either way is fine. Reimbursing in units simply saves the club the trouble of writing a check, nothing more.

-Jim Thomas

--- On Sat, 9/27/08, Henri Russell <henriz@bivio.com> wrote:

> From: Henri Russell <henriz@bivio.com>
> Subject: club_cafe: Re: RE: Paying for Bivio Account
> To: club_cafe@bivio.com
> Date: Saturday, September 27, 2008, 12:28 PM
>
> Jim - I have been the treasurer for our club since its
> inception in 1995. I have never gone through this process
> to record a reimbursement to me for payment of Bivio etc.
> I have always just shown the check as an expense to be
> allocated to the club members equally and noted that it was
> for reimbursement of Bivio. Is this going to be a problem
> in our accounting?
>
>> (1) Accounts -> Expense
>>
>> Account: Suspense
>> Transaction Date: date of the credit card
> payment
>> Amount: bivio subscription cost
>> Category: "bivio Subscription"
>> Allocate Equally Among Members: No (do not
> check the box)
>> Remark: "Treasurer paid with personal
> credit card."
>>
>> (2) Members -> Payment(s)
>>
>> Transaction Date: date of the credit card
> payment
>> Member Valuation Date: same as Transaction
> Date
>> Account: Suspense
>> Default Remark: "Reimbursement for bivio
> subscription paid with personal credit card."
>> Amount: bivio subscription cost entered for
> treasurer, all others zero.
>>
>> -Jim Thomas



      

Jim,
Your instructions were perfectly detailed. It's been a while
since the question, and I went back, found your message, and
all the information was right as you wrote.
Whew! Thank you! MUCH appreciated
Carol

Jim Thomas wrote:
> Carol,
>
> > Would be grateful to hear from others what the best way
> > is for a stock club to pay for the Bivio subscription.
>
> If you're asking about the mechanics of paying for the bivio subscription, here's how my club does it.
>
> The treasurer (it could be a different club member) pays the subscription using their personal credit card. Then the following two transactions are entered into bivio. The first transaction records the bivio subscription as a club expense. The second transaction reimburses the member who paid for the subscription with club units equal in value to what they paid with their credit card. Note the use of the "suspense" account with both transactions (the two transactions net out to zero, leaving the suspense account balance unchanged).
>
> (1) Accounts -> Expense
>
> Account: Suspense
> Transaction Date: date of the credit card payment
> Amount: bivio subscription cost
> Category: "bivio Subscription"
> Allocate Equally Among Members: No (do not check the box)
> Remark: "Treasurer paid with personal credit card."
>
> (2) Members -> Payment(s)
>
> Transaction Date: date of the credit card payment
> Member Valuation Date: same as Transaction Date
> Account: Suspense
> Default Remark: "Reimbursement for bivio subscription paid with personal credit card."
> Amount: bivio subscription cost entered for treasurer, all others zero.
>
> -Jim Thomas
>
>
>