Troop Accounting methodology

[Pgdavis2]

Our troop has grown to the point that we need to improve our accounting processes.
We are currently implementing TroopWebHost which includes accounting features.
Basically we are moving from cash accounting to accrual and I am sure there are some gotchas.
Does anyone here have some experience with it you'd like to share?
Any "lessons learned"?

[kwildman]

No experience or lessons learned...but i am curious why you would want to go to accrual accounting. Cash accounting keeps track of cash as it it changes hands...you enter money into the troop account when your receive it and you deduct money when you spend it. Accrual accounting is typically done when you know you are getting money but haven't received it yet - you perform a service and then send an invoice and count the money before you actually receive it.

Both systems have pluses and minuses but i don't see the pluses in the context of troop accounting. The minuses i see are that if you are anticipating getting money and then you don't actually receive it you could potentially over draw your accounts.

This is an interesting topic!

[ismellbacon]

When I was Treasurer, I found that Excel Spreadsheets work just fine... one for each campout, one for dues, one for scout accounts, and a ledger.

I also saved each spreadsheet under a different file each time I modify it (i.e. Julycampout7-1-12, Julycampout7-15-12) that way I can do forensic accounting if one gets screwed up later on.

I believe in the KISS method on accouting, don't try to kill yourself with fancy programs and graphs and all that... simple debit/credit sheets works just fine.

I print out the sheets that have outstanding debts for the troop meetings so that I could grab a scout if they owe money for something.

I would also give a reciept for all money transactions in case there are some disputes 6 months down the road.

My two cents (HA!)

[Fred Johnson]

http://meritbadge.org/wiki/index.php/Treasurer_-_Good_Practices

[Fred Johnson]

On a side note, TroopWebHost is pretty good in some ways. I really like the accounting features. Just be careful of the main financial summary report. It is accurate and useful. But I think it makes a mistake in presentation. It subtracts negative scout accounts from positive ones to represent how much cash is owned by the troop. Though that is okay for a quick analysis, it's not strictly correct and mis-represents how much money the troop can spend.

Every penny of positive scout accounts is a liability to the troop in that the troop needs to hold that much money in reserve to cover that commitment. BUT ... negative scout accounts can't be used to fund positive accounts. Possitive scout accounts are a commitment by the troop (i.e. a liability). It sounds strange, but negative scout accounts are actually an "asset" to the company and represent an asset stream of additional funds the troop can freely use when and "IF" the funds are collected.

This applies practically in that the unit bank account "should" not drop below the balance of the positive scout accounts.

I think this is something troops can sometimes get in trouble with. They don't really know how much money is committed and how much is free to spend.

[Quailman]

While I agree that funds should be retained in an amount equal to or greater than Scout accounts, that money is still the troop's. It can't be paid out to the youth, and the timing of the outlay can be projected - down payment for summer camp, outlay for next month's campout, etc.

If you ask someone from the IRS how you should account for the "scout accounts", she'll tell you that you shouldn't. But that's a different discussion.

The negative balances are receivables and represent amounts due from scouts for whatever reason - recharter, summer camp, grub fees. If you get too lax with these, you'll go broke, as parents will take advantage of you. "Oh, I didn't get the summer camp payment to you at the drop dead date but you covered it for me? So you'll float me a loan on the Philmont deposit too, right?"

[Fred Johnson]

While I agree that funds should be retained in an amount equal to or greater than Scout accounts, that money is still the troop's. It can't be paid out to the youth, and the timing of the outlay can be projected - down payment for summer camp, outlay for next month's campout, etc.

If you ask someone from the IRS how you should account for the "scout accounts", she'll tell you that you shouldn't. But that's a different discussion.

Quailman ... Your absolutely correct. The money is owned by the troop and outlays can be projected and usually don't happen all at once. I just meant that if a troop is to do the scout account game, then the troop should not spend into the amount they are telling the scouts is reserved for their use.

As for the IRS... It's for another discussion. A major one and it's been hashed around many times. I always wonder why the IRS does not clarify the details or provide clear guidance. IRS seems to always say "may" violate rules. I don't think it's because there is a right way to do scout accounts as much as I think the IRS wants to avoid youth groups issuing millions of 1099's to youth for their fundraising in amounts of $50 dollars or $100. It wouldn't increase IRS revenue, just increase IRS cost and paperwork. Of course, this opinion is not based on any real knowledge. Just too many late nights doing scout paperwork, reading and watching Doctor Who at the same time.

[Pgdavis2]

I think any way you do it there are pros and cons and any method requires adhering to some very clear guidelines.
With the scout accounts, we will not let them go negative beyond a few bucks, and the next transaction on a negative balance needs to be adding funds not the other way. Limit the liability.
Likewise, we will probably set an account maximum so the size of the troop liability stays within set limit. If the account goes above the limit you will get a check in the mail kind of thing.
A few things I think we will like:

[*]Transactions can be tied to events
[*]Fewer checks to write. I often drive and/or buy food for campouts. Currently I write the troop a check for the campout registration for me and my 2 boys (~$100) and get a reimbursement check for food and gas I buy. With the accounts, I can simply decline the reimbursement and use that money for a future campout, so no back and forth on the checks. I hate checks anyway...always seem to forget the checkbook!
I appreciate all the thoughtful responses!

[Mrw]

I see an issue with sending a check to a family whose Scout Dollars account has too high of a balance. That gives free rein to them to not use the money raised for scoutning to be used far anything else, which is not quite right on a moral basis.

The other issue is if the family is using the account to save money for an expensive trip such as SeaBase or Philmont. If the funds are raised for that trip over several months or maybe even over a year, they can amass a pretty big balance. This is quite common in our troop.

[Quailman]

Do not send a check to the family. You will be putting the Charter Organization at risk of losing their non-profit status.

Instead, encourage the boy who sold all that popcorn to go to an extra week of camp, the OA powwows, etc. We've recently reminded our scouts that they can use their scout accounts for MB fairs and scout programs at the local museum. Actually we only had to remind the three who work so hard at fundraising.

[kwildman]

we never provide checks to families unless it is for a reimbursement. If the family spends $80 on new uniform they can turn the receipts into the troop and we will the reimburse them.

[Quailman]

That's reasonable, and a perfect example of what the scout account is for. Distributing excess fundraising money for other than reimbursement goes over the line that says you shouldn't do scout accounts to begin with.

[ismellbacon]

I don't think doing scout accounts are a big deal. If the scout has money in his account, then he can use it for anything scouting related. We will credit it towards a campout or reimburse him for food or uniforms, etc...

We don't put a limit on how much a boy can accumulate, but we do keep an eye on it. We encourage them to use their accounts if it starts getting close to $100. But, if they want to keep building it up for something, like summer camp, then that is fine by us.

We don't cut checks outright to lower an account, that seems like a bad idea to me. We will cut a check for another unit if the boy transfers, but that is it. If the scout is inactive for 24 months, then that money is absorbed into the troop funds. We had two scouts recently come back after being gone for over a year, and their money was still there waiting on them.

Something else my troop does, is it tries to keep a float. A float of money so that we don't have to hammer boys about paying dues or campout fees on an exact date. We encourage them to pay on time, and give gentle reminders, but we don't beat people up about it. This refers more to the scouts and their families that are struggling financially than those that can afford it. By the grace of God, we have never had funding troubles and we become more financially sound year-over-year.

It's pretty easy to keep up with money if you are keeping accurate records, generating periodic reports, and making realistic projections for the upcoming year. And, don't rob Peter to pay Paul... if the money is earmarked for Social Security, then don't spend it on free cellphones (oops, thats another thread!)

[Pgdavis2]

Thanks for all the input.
What other systems are troops using out there? I know of TroopWebHost and TroopLedger. Are there others designed for troops?

[Fred Johnson]

I use Quicken and it works very very well.

- I used TroopLedger, but it was complex, flaky and with an old-school interface.
- I tried TroopWebHost. It looks promising, but still young and developing.
- We use SOAR for online. TroopMaster for advancement and misc records. Quicken for finances.

IMHO, keep finance records simple.