Hi Christine,

It is very difficult to do club accounting and keep everyone "equal" though I understand how many clubs start out thinking this is important. My own club felt this way for many years. But, a club should be a longtime group and sooner or later, it will become impossible to maintain the accounting rigidity that would be needed to accomplish this.

I know that we finally stopped worrying about it and it hasn't made a bit of difference to the operation or success of our club. bivio's job is to make sure that everyone is accounted for accurately and fairly.

If you use a single valuation date, everyones contributions will purchase the same number of shares each month. However, their percentage of ownership doesn't actually change until the transaction date of their payments. So if payments are received and recorded on different days, in the interim time, people will own different percentages.

Income such as a dividend is allocated to members based on their ownership percentages on the date that it is received. So if it comes in during the interim time, it will not be allocated to everyone in the same percentage.

This is not because the income is changing the valuation you are using to record the member payments. It will stay at one value for the entire month. By the end of the month, each member will have received the same number of units for the same contribution. They just will have received them on different days.

The only way that income will be allocated to each person in the same amounts is if you have one valuation date and only allow member deposits on one date.

That is pretty difficult to achieve/maintain, especially for long periods of time. That is why we encourage everyone to let go of the idea of "equal" and keep your club accounting simple. If you want to accommodate members making payments on different days that's fine. The easiest and we think the fairest way to do your accounting is to use the transaction date as the valuation date. Just like a mutual fund, member contributions will purchase shares at the value they are at when their contributions are received.

If you don't want to allow this much flexibility, you might find it more important to have a club requirement that all payments come in on a certain date. I know I personally, as a club treasurer, do not want to have the responsibility of chasing down payments to try and meet this criteria. The only way I know to accomplish it in a reasonable manner is to only require annual or quarterly contributions or to require members to set up automatic electronic transfer to send in their payments to the club account to arrive on a specific day.

We do this in both my clubs and it works great. Members know they are expected to do this when they join. It is consistent from month to month and we always know how much money we will have to invest at our meetings each month.

Laurie Frederiksen