Advice on Expenses
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Advice on Expenses Ok, I know I have asked a similar question in the past but I'm going to ask again in a different way and hopefully some of you guys can give me some advice on a better or more efficient way to do this. Our club has two accounts set up. The first account is at a local credit union and consists of a savings account and a checking account. It is a business account and set up in the name of our partnership. These accounts are not linked to Bivio. Our second account is our brokerage account at Scottrade and it is linked to Bivio. Every month, as the treasurer, I collect all the investments from members and deposit them into our credit union checking account and then write one check and send it to Scottrade. Additionally, once per year, our club collects money from each member to cover expenses of the club. I collect this money and deposit it into our local credit union savings account and then transfer it to the checking account and write checks as the expenses come due throughout the year. First question - is there a better / more efficient way to handle the monthly investments? Second question - what is the best way to handle the expenses of the club? The way we are doing it does not have it accounted for in Bivio and I believe it is an incorrect way to be doing it. Thanks in advance for any advice you have. I appreciate all the help. Andy Why not put all your money in with a broker that allows you to write checks? That way you can deposit the investment checks and as you need, you can write checks from the same account and properly list them as expenses or whatever. Just a thought. Bivio works well with this type of account. On 1/8/2011 10:53 PM, Andrew Butler wrote: > Ok, I know I have asked a similar question in the past but > I'm going to ask again in a different way and hopefully some > of you guys can give me some advice on a better or more > efficient way to do this. > > Our club has two accounts set up. The first account is at a > local credit union and consists of a savings account and a > checking account. It is a business account and set up in > the name of our partnership. These accounts are not linked > to Bivio. > > Our second account is our brokerage account at Scottrade and > it is linked to Bivio. > > Every month, as the treasurer, I collect all the investments > from members and deposit them into our credit union checking > account and then write one check and send it to Scottrade. > > Additionally, once per year, our club collects money from > each member to cover expenses of the club. I collect this > money and deposit it into our local credit union savings > account and then transfer it to the checking account and > write checks as the expenses come due throughout the year. > > First question - is there a better / more efficient way to > handle the monthly investments? > > Second question - what is the best way to handle the > expenses of the club? The way we are doing it does not have > it accounted for in Bivio and I believe it is an incorrect > way to be doing it. > > Thanks in advance for any advice you have. I appreciate all > the help. > > Andy Andy,
Let's start with expenses first. In 17 years of clubbing, we have never had a need for an expense account. When we were members of NAIC, we would pay for our own memberships. If you are paying for the club wrap-around, you can still collect individual checks and place them all in the envelope to BI.
If we need copy paper, someone buys a case and they are either reimbursed with a club check out of our ONLY general fund, or we credit that amount to their capital account. If we rent a room for an investing event, it comes out of the general fund. If we buy meat for the club BBQ, a member buys it and gets reimbursed. Same with stamps and manilla envelopes for our annual taxes. It all goes into bivio. Some are posted as bonefide, deductible expenses. Others, like party supplies and food, are not deductible. But they still come out of the same, single account where our club dues are deposited. The only thing I can think of that we would have to write a check for is the annual bivio subscription. Every transaction you make is club-related and part of doing business. If you simply have members pay for their personal subscripitons, there's no need for the savings (expense) account. As for the checking account, we use Firstrade.com which is not part of the AccountSync system. We still keep a checking account at our local bank. (Hey, old habits die hard! <G>) We set up an ACH electronic transfer between our broker and bank accounts and it's a free and quick transaction to transfer money back and forth, as needed. I'm pretty sure that Scottrade offers ACH transfer. In that case, you would make your bank deposit and transfer the money (typically via an email instruction) the next day. All done.
However, I'm pretty sure that, by now, Scottrade offers check writing privileges. If that's the case, then it really would be easier to simply dump the bank altogether and go solely with Scottrade. But here's a caveat. Make sure you ask the minimum for check writing. Most brokers have minimums. Let's say someone joins your club, then decides to leave in 3 months. (Wasn't want they thought it would be. It happens!) If Scottrade has a $100 minimum, and you owe someone less, members will have to cover it.
Keeping the one bank account is not a big deal for us. Now, as far as bivio not being right with regard to expenses, that's an input function that is your responsibility as treasurer. Here's a tip. Balance all accounts to the penny every month, and you won't have any worries.
Hope that helps.
Lynn Ostrem
Crow River Investment Club
Hi Andy,
<<
Ok, I know I have asked a similar question in the past but I'm going to ask
again in a different way and hopefully some of you guys can give me some advice
on a better or more efficient way to do this.
>> Yes, you have asked the question before, but, in spite of your 'different
way', I don't have 'different' advice to give you. Set your local credit union
account up on bivio. The transactions won't be accountsynced, but all the
expenses will then be recorded on your club's books, and your members will
receive a deduction for any expenses paid. You will record, in bivio, the
of your members' payments in the credit union. Accountsync will record the
transfer of those funds into your broker account. You will enter any expenses
paid as a disbursement from the credit union account. It is not difficult.
Rip West
Saint Paul, MN So many treasurers think its a big deal to record transactions by hand. But how hard is it to record 3-5 transactions?! <g> I don't know about most clubs, but I have one deposit every month, and one transfer between accounts about every other (bivio handles that with a "transfer" button.) I balance our checking account monthly to make sure it balances with bivio. Typically, it's only one or 2 transactions.
I print the broker statement and check off every item listed to make sure I logged them onto bivio properly. Even if you have AccountSync, I'd do that monthly to make sure there are no errors. I may have one buy or sell to log, and a couple of dividends. I make sure my broker cash balance matches with bivio.
At the end of the year, all I have to do is push a couple of buttons in bivio and all income (dividends) and expenses (deductible or not) are properly divided among my members, and the tax documents are created accordingly.
My monthly activities might take me 5-8 minutes, max. And that's with one bank account and one broker account.
Lynn <<
I print the broker statement and check off every item listed to make sure I
logged them onto bivio properly. Even if you have AccountSync, I'd do that
monthly to make sure there are no errors.
>>
YES!! That's very important. AccountSync is not guaranteed to be 100%
accurate. As we keep saying, it's a case of two computers trying to speak to
each other, and problems can occur. Every club should reconcile their broker
account, at least monthly.
Rip West
Saint Paul, MN Scottrade does not allow clubs to write checks. My Club uses TDAmeritrade and tried switching to Scottrade a few months ago but stopped the process because we need check writting privileges.
John Rice
From: Lynn Ostrem <garbagecop@gmail.com> To: The Club Cafe <club_cafe@bivio.com> Sent: Sat, January 8, 2011 11:40:04 PM Subject: Re: club_cafe: Advice on Expenses Andy,
Let's start with expenses first. In 17 years of clubbing, we have never had a need for an expense account. When we were members of NAIC, we would pay for our own memberships. If you are paying for the club wrap-around, you can still collect individual checks and place them all in the envelope to BI.
If we need copy paper, someone buys a case and they are either reimbursed with a club check out of our ONLY general fund, or we credit that amount to their capital account. If we rent a room for an investing event, it comes out of the general fund. If we buy meat for the club BBQ, a member buys it and gets reimbursed. Same with stamps and manilla envelopes for our annual taxes. It all goes into bivio. Some are posted as bonefide, deductible expenses. Others, like party supplies and food, are not deductible. But they still come out of the same, single account where our club dues are deposited. The only thing I can think of that we would have to write a check for is the annual bivio subscription. Every transaction you make is club-related and part of doing business. If you simply have members pay for their personal subscripitons, there's no need for the savings (expense) account. As for the checking account, we use Firstrade.com which is not part of the AccountSync system. We still keep a checking account at our local bank. (Hey, old habits die hard! <G>) We set up an ACH electronic transfer between our broker and bank accounts and it's a free and quick transaction to transfer money back and forth, as needed. I'm pretty sure that Scottrade offers ACH transfer. In that case, you would make your bank deposit and transfer the money (typically via an email instruction) the next day. All done.
However, I'm pretty sure that, by now, Scottrade offers check writing privileges. If that's the case, then it really would be easier to simply dump the bank altogether and go solely with Scottrade. But here's a caveat. Make sure you ask the minimum for check writing. Most brokers have minimums. Let's say someone joins your club, then decides to leave in 3 months. (Wasn't want they thought it would be. It happens!) If Scottrade has a $100 minimum, and you owe someone less, members will have to cover it.
Keeping the one bank account is not a big deal for us. Now, as far as bivio not being right with regard to expenses, that's an input function that is your responsibility as treasurer. Here's a tip. Balance all accounts to the penny every month, and you won't have any worries.
Hope that helps.
Lynn Ostrem
Crow River Investment Club
Lynn, I am not a treasurer but I would like to learn the ropes anyway. What do you mean by bivio handles the transfer by hitting the transfer button? Do you mean handling the transfer in your records rather than the physical transfer of telling the bank to transfer the money to the brokerage account? When you deposit the checks into your checking account, do the individual entries show up or is it one lump sum? When you move the money over, does the brokerage account show it as one lump sum? I am treasurer for another organization and I grapple with this periodically. Sometimes I deposit each check separately so that I can track the individual checks. For something like an investment club, I would want to record each member deposit rather than deposit a lump sum like you speak of. Linda,
Here's how it works for me.
1. I collect the checks at the meeting, complete my deposit slip, and I record each member name and amount in my check register. True, is old fashioned! But at least I don't have to worry about forgetting to log it into the computer. It's in the register forever.
2. I make the deposit at the bank.
3. I log onto my broker account and click on their "transfer money now" button. I choose the dollar amount and which direction, i.e. whether I'm transferring it "into" or "out of" my bank account. Someimes, if I make the deposit the night before, make the transfer early in the morning, it will show up in our broker account in the afternoon (usually next day), so I can literally make our stock purchases the day after the meeting. ACH transfers are very fast.
(And if Scottrade accepts ACH transfers, Andy can continue to deposit checks at the credit union and simply transfer the funds over. It's easy to say, "find a different broker" but have you ever looked into the cost of transferring stock? For many clubs, it's cost-prohibitive."
4. Once I have requested the transfer to be completed by the broker, I then must go into bivio and record it. If I am transferring dues to the broker to be spent on stocks, I will log my deposit into bivio, then click on the bank account, click the "transfer, button, complete the information, such as date, dollar amount and to which account I am transferring, i.e. the broker. bivio will create the entries in and out of these two accounts for me and adjust the balances accordingly. This whole process takes LESS TIME than it takes me to actually pull up my broker and bivio accounts on my computer! <G>
Linda, in most clubs, members pay the same amount at the same meeting, with the occasional rogue check. Check registers are cheap! Banks give them away. I don't need to use more than 2 lines in mine to log the checks I'm depositing in any given month, but you could use half the page each month and it would accomplish the same thing (creating the record) with A LOT less hassle than making individual deposits. You'd just go through more registers, that's all.
If, in the other organization you mentioned, you have considerably more people, like you would at a church or a 100-member Toastmaster's group, then I recommend a simple log book, just for deposit details. Don't over think it.
Lynn This has been a great discussion and some great advice! Thanks everyone for weighing in. It has given me a lot to think about and some things to change. One more quick question - sorry for my ignorance - if I set up my local credit union account on Bivio and just manually enter the transactions, how do I get the beginning balance into Bivio? Maybe I am missing something here but there is money sitting in our local account and I need to account for that somehow in Bivio don't I? Thanks again everyone, I really appreciate the support and help. Andy Lynn Ostrem wrote: > Linda, > > Here's how it works for me. > > 1. I collect the checks at the meeting, complete my deposit slip, and I record each member name and amount in my check register. True, is old fashioned! But at least I don't have to worry about forgetting to log it into the computer. It's in the register forever. > > > 2. I make the deposit at the bank. > > 3. I log onto my broker account and click on their "transfer money now" button. I choose the dollar amount and which direction, i.e. whether I'm transferring it "into" or "out of" my bank account. Someimes, if I make the deposit the night before, make the transfer early in the morning, it will show up in our broker account in the afternoon (usually next day), so I can literally make our stock purchases the day after the meeting. ACH transfers are very fast. > > > (And if Scottrade accepts ACH transfers, Andy can continue to deposit checks at the credit union and simply transfer the funds over. It's easy to say, "find a different broker" but have you ever looked into the cost of transferring stock? For many clubs, it's cost-prohibitive." > > > 4. Once I have requested the transfer to be completed by the broker, I then must go into bivio and record it. If I am transferring dues to the broker to be spent on stocks, I will log my deposit into bivio, then click on the bank account, click the "transfer, button, complete the information, such as date, dollar amount and to which account I am transferring, i.e. the broker. bivio will create the entries in and out of these two accounts for me and adjust the balances accordingly. This whole process takes LESS TIME than it takes me to actually pull up my broker and bivio accounts on my computer! <G> > > > Linda, in most clubs, members pay the same amount at the same meeting, with the occasional rogue check. Check registers are cheap! Banks give them away. I don't need to use more than 2 lines in mine to log the checks I'm depositing in any given month, but you could use half the page each month and it would accomplish the same thing (creating the record) with A LOT less hassle than making individual deposits. You'd just go through more registers, that's all. > > > If, in the other organization you mentioned, you have considerably more people, like you would at a church or a 100-member Toastmaster's group, then I recommend a simple log book, just for deposit details. Don't over think it. > > > Lynn Andrew, If you go to the bivio home page, you will find a link to a booklet called "Getting Started." http://www.bivio.com/f/bivio-guide.pdf The booklet shows you how to set up your bivio account for all scenarios. It also suggests that each member be assigned a different payment value (p. 48) so that bivio can identify the transaction. I find the club cafe site has lots of presentations to cover details of various subjects. Andrew Butler wrote: > This has been a great discussion and some great advice! > Thanks everyone for weighing in. It has given me a lot to > think about and some things to change. > > One more quick question - sorry for my ignorance - if I set > up my local credit union account on Bivio and just manually > enter the transactions, how do I get the beginning balance > into Bivio? Maybe I am missing something here but there is > money sitting in our local account and I need to account for > that somehow in Bivio don't I? > > Thanks again everyone, I really appreciate the support and > help. > > Andy > > > > Lynn Ostrem wrote: > > Linda, > > > > Here's how it works for me. > > > > 1. I collect the checks at the meeting, complete my deposit slip, and I record each member name and amount in my check register. True, is old fashioned! But at least I don't have to worry about forgetting to log it into the computer. It's in the register forever. > > > > > > 2. I make the deposit at the bank. > > > > 3. I log onto my broker account and click on their "transfer money now" button. I choose the dollar amount and which direction, i.e. whether I'm transferring it "into" or "out of" my bank account. Someimes, if I make the deposit the night before, make the transfer early in the morning, it will show up in our broker account in the afternoon (usually next day), so I can literally make our stock purchases the day after the meeting. ACH transfers are very fast. > > > > > > (And if Scottrade accepts ACH transfers, Andy can continue to deposit checks at the credit union and simply transfer the funds over. It's easy to say, "find a different broker" but have you ever looked into the cost of transferring stock? For many clubs, it's cost-prohibitive." > > > > > > 4. Once I have requested the transfer to be completed by the broker, I then must go into bivio and record it. If I am transferring dues to the broker to be spent on stocks, I will log my deposit into bivio, then click on the bank account, click the "transfer, button, complete the information, such as date, dollar amount and to which account I am transferring, i.e. the broker. bivio will create the entries in and out of these two accounts for me and adjust the balances accordingly. This whole process takes LESS TIME than it takes me to actually pull up my broker and bivio accounts on my computer! <G> > > > > > > Linda, in most clubs, members pay the same amount at the same meeting, with the occasional rogue check. Check registers are cheap! Banks give them away. I don't need to use more than 2 lines in mine to log the checks I'm depositing in any given month, but you could use half the page each month and it would accomplish the same thing (creating the record) with A LOT less hassle than making individual deposits. You'd just go through more registers, that's all. > > > > > > If, in the other organization you mentioned, you have considerably more people, like you would at a church or a 100-member Toastmaster's group, then I recommend a simple log book, just for deposit details. Don't over think it. > > > > > > Lynn Andy [and Linda],
You won't be able to use Linda's suggestion to for setting up your cash
account, because the 'beginning balance' method in there only applies to clubs
with no transactions before the date as of which you are setting up your
account in bivio. You first must decide if you want to set the account up as of
1/1/2010 and enter the transactions for 2010, or simply set it up as of
1/1/2011 and record the transactions for 2011 and thereafter. If you set it up
as of 1/1/2011, you could enter the balance as of that date as a payment from
each member in the proportion of ownership. For instance, if you were to set up
a beginning balance of $100, you would enter a payment of $10 from a 10% owner,
etc.
Rip West
Saint Paul, MN Same with our club, Lynn. It’s wonderful. I’ve been down that other road of recording all the transactions, dividends, etc. As the saying goes, Been There, Done That.” I love this system. Henri My monthly activities might take me 5-8 minutes, max. And that's with one bank account and one broker account.
Lynn |
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