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Chapter Accounting

  1. General Accounting
    There has been a long-felt need to devise an accounting team for use by Chapters of the American Society of Military Comptrollers. This system has been designed to fulfill that need. An attempt has been made to have it as simple as possible, and to design it along practical lines enabling its easy use. At the same time, the system is complete enough to fully satisfy the accountability requirements of most Chapters.

    The Chapter should bear in mind that keeping adequate and proper records is only the first step. If they are to be meaningful and have purpose, the records must be used and referred to as often as the demand dictates. This use should enable officers, directors and the Chapter to get a clear financial picture at any time of the Chapter’s operation and to see the financial status of the Chapter. The system should provide support for any particular transaction and must be adequate to provide for the safe-guarding of chapter assets and prevent malfeasance or misfeasance.

    The accounting and auditing policies and methods followed by Chapters have been many and varied. It is essential that there be uniformity in respect to certain things. All Chapters should comply With the following:
    A. The Treasurer will be the cash receiving and disbursing agent and the official bookkeeper. All funds must be handled by him or her and recorded on the chapter records by him or her.
    B. The books of the Chapter will be kept on the basis of the calendar month. That is, all entries will be brought up to date and reports prepared as of the last day of each calendar month during the Chapter year.
    C. All cash received must be deposited promptly. All payments are to be made by check, except minor payments which may be made from petty cash. In other words. payments are not to be made directly from cash received.
    D. All checks used are to be pre-numbered by the bank. The Chapter may elect to have two signatures required on checks.)
    E. Every check issued must be supported by a voucher properly drawn and signed by the President and the Chapter director responsible for the payment.
    F. Check stubs must be carefully kept up to date showing deposits and withdrawals so that the available bank balance will be shown at all times.
    G. Bank reconciliations will be made monthly by the Chapter director responsible for auditing. Bank statements will be sent directly to that member.
    H. The books shall be open for the inspection of all Chapter members at any reasonable time. They shall also be available at designated Chapter meetings.
    I. The Treasurer will make periodic reports to the membership of income and expenses and assets and liabilities. The report will be signed by the Treasurer and the director responsible for bank reconciliations (auditing). (See item g above.)

    The basic policies as set forth in the introduction should be adhered to in the use of this system. The headings on the forms of the System are self-explanatory and can be followed easily. However, following are detailed step-by-step instructions relative to the proper and correct method of using the system. It is suggested that whenever there is a question as to the exact meaning of any particular section or column that reference be made to the instructions, the specific problem should be presented in detail to the National Office.

  2. Cash Receipts
    The first entry of the month should be the bringing forward of the last month’s bank balance. The amount should be in the Cash Balance column only.
    All cash received shall be recorded on a cash receipt voucher. This applies to National and Chapter dues, workshop registration fees, and all other items of revenue received. A numbering system, such as RI-3 could be used to identify receipt number I for FY 83 Revenue entries in the system will originate from receipt vouchers. Any revenue transaction can then be checked back to the point of original entry–the receipt voucher. Each cash receipts voucher should contain all of the information necessary to support the receipt. As an example. a voucher supporting meal receipts should identify the prenumbered meal checks that were sold.

    The total amount of cash received from chapter meals, national and chapter dues, workshop registration fees, and all other items of revenue received should be entered in the appropriate columns of a Journal. After each entry into the system, the cash balance should be computed. (in the event of receipts, add to the balance.)

    Cash and checks should be deposited in full as frequently as necessary; no less than once a week. It is unwise to keep cash on hand, and it is also a bad habit to hold checks for long periods of time. ALL CASH RECEIVED SHOULD BE DEPOSITED. Therefore, the total amount of cash received should equal the total of the deposits or any given period. The amount of each deposit should equal the total amount of cash received since the last deposit. Add the amount of the deposits to the amount in the Cash Balance Column on the prior line.

    When the items received in a given month have been entered in the Cash Receipts section of the Journal, the total received from Meals, Dues, Registration Fees, and Other Revenue items should equal Total Cash Received. As just stated, the Total Cash Received should be the same as the Deposits.
    The columns should contain the entries as follows:

    • Meals: Revenue from tickets sold for luncheons or dinners when not included in workshop fees. Revenue from “happy hour” activities should also be included in this column.
    • Dues: Chapter and National dues.
    • Workshops: All revenues from educational events. including advertising in programs, etc.
    • Other: All other revenue. such as interest received on deposits, sale of rings and pins, etc.
  3. Cash Payment
    As a general rule, the Treasurer should have all of the current month’s bills paid by the last day of the month. He or she should take the Disbursements Voucher with the bills attached, from the unpaid file and prepare the checks. Checks should be signed by the Treasurer (President also if two signatures are required). Checks should be properly recorded on the check stub giving date, payee, check number, amount, and a reference to the voucher.
    Preparation of the disbursements voucher is important, as there must be some authority for every check and, also, adequate explanation. Uniformity in this respect can best be secured by the use of the disbursement voucher. Vouchers are signed by the director responsible for the activity and approved by the President, and are then given to the Treasurer for payment.

    The date paid, check number, the name of the individual or firm to whom paid should be entered in the appropriate columns of the Journal. The total amount of the check should be entered in the Paid Out By Check column. This amount should be subtracted from the Cash Balance amount on the prior line. The amount paid on the same line under the proper heading should be entered in the expense columns on the double page to show what the payment was for. The Journal now becomes a complete record of all disbursements. It will enable one to see at a glance what the money is being paid ‘or, to look up any item quickly, and to easily prepare a summary for the monthly report or any other necessary reports.

    Each of the columns should contain the entries for expenses as shown below. Each item should be identified in the column, “Program,” as to the program concerned, such as education, publications, research, etc. Examples are:

        Postage: Stamps, stamped envelopes, Post Office box fee, etc.

Newsletter: Paper, artwork, printing, typewriter rental, etc.

Meals: All meals, except chapter guests, the cost of liquor when
receipts are in “Meals-Receipts”. This includes Chapter subsidy when
the charge to Chapter members is less than the cost to Chapters.

Gifts:Gifts to Chapter speakers, award plaques, certificates, etc.

Supplies: All supplies except stationery: bookkeeping supplies.

Stationery: Cost of printing letterheads, artwork, envelopes without
postage.

Honoraria: Fees paid to speakers or seminar or workshop leaders.

National Dues: The National portion of dues remitted to the National
Office. This is normally only for new members, as renewal dues are
billed by the National Office. For new members, chapter dues can be
collected and retained by the chapter.

Travel: In-city travel, as well as inter-city travel of officers,
members, and speakers.

Officers’ Expense: Direct expense of officers as incurred in the
pursuit of their activities.

Entertainment: Guest meals, refreshments at directors meetings, etc.

Other: All other expenses, including bank service charges.

  • Balancing The Journal
    To balance the two Journal pages, columnar totals should be compared as follows: the totals of the columns headed Meals, Dues, Workshops, and Other, should equal the total of the column headed Total Cash Received. The column headed Paid Out By Check should equal the totals of all disbursement columns from Postage, Newsletters, Stationery, etc. extending across the second page. By subtracting the total of the column Paid Out By Check from ‘total Cash Received, the result should be the same as the last amount in the Cash Balance Column after adjusting for the beginning cash balance.
  • Month Ending Procedure
    All records should be written in ink. However, pencil totals of columns brought down to date from time *to time during the month will save considerable time at the end of the month. The work at the end of the month will normally be done starting on the last day of the month and finished before the next chapter meeting with the order of steps as follows:
    1. The columns of cash receipts and disbursements should be footed.BR>
    2. The bank balance as shown by the check stubs should agree with the cash balance column. The balance will be reconciled with the bank statement by the auditor.
    3. The bank reconciliation should be prepared by the auditor by:
    1. Comparing the canceled checks with the entries or, the bank statement. (A reconciliation, in accordance with the instruction on the back of the bank statement should also be performed.)
    2. If they correspond. the checks should be sorted in numerical order and checked against the entries in cash disbursements, placing a small check mark behind each amount if the check has been returned.
    3. The unchecked items will thus represent the checks outstanding, and the amounts are added and the total deducted from the balance shown on the bank statement.
  • By deducting the outstanding checks, the reconciled balance should be the same as the available bank balance on the check stubs and as the cash balance in the Journal.
  • Prepare monthly reports. The information on the Income Statement (page 1) will be taken from the columnar totals of revenues and expenses in the Journal. Page 2 of the Monthly Report will contain a program analysis of the revenue and expense items on page 1. This analysis will be prepared using information from the “Program” column in the Journal. The programs should be those identified by, the Chapter as having major importance in the chapters activities. The totals of the Program Revenue and Expense columns of page 2 of the report should agree with the totals on page 1 of the report.
    The Balance Sheet on page 2 will be handled on a memo basis (accrual basis). Accounts Receivable and Accounts Payable will be aggregated from subsidiary memo records and kept up to date as payments are received or disbursements made. Furniture, Fixtures, etc. will also be accumulated on memo records.

    There will be no accruals for receivable and payable in the Income Statement. Reports of workshops and seminars, although computed on an accrual basis, should be converted to a cash basis so as to be integrated into the Income Statements. Thus, accounts receivable will be considered revenue when cash is received, and accounts payable will be considered expenses when paid.

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