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Amy Rauch Neilson
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| 04/24/2008 4:31 PM |
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OK, so my last column left me with a question: Where are all of your questions?
As I mentioned in Part I, the very first posting I received when I began writing this column was a plea for pointers on becoming a really good club treasurer. Since this is an online forum, I can do what print-only columnists cannot – I can see how many “views” a particular column has had (To be honest, it feels a little bit like cheating.). As of this writing, more than 500 of you have viewed (and hopefully read) Expert Tips for Club Treasurers: Part I. Five hundred views, but zero posted questions. So, this leads me to one of two conclusions. Either my column was absolutely, positively, without a doubt perfect (not so likely, as much as I’d like to believe that…) or, my readership is shy (much more likely).
So, before I move on to the rest of the column, I’m going to turn the tables a bit. I’m going to give you a deadline. During the next few weeks, I’m going to continue to consult with ICLUBcentral’s own club accounting experts and relay their top tips for terrific club treasurers – insights that hopefully will make your job a lot easier, whether you’re an experienced club treasurer or brand-new to the job. If you have a question, it’s up to you to post it before the series comes to a close sometime in late May. Otherwise, you’re out of luck.
Just kidding. Of course, I’ll always be ready, willing, and (with some help from the true accounting experts) able to answer questions regarding the awesome (and sometimes overwhelming) job of club treasurer. That said, I’d like to point out that this series is your golden opportunity to ask, ask, ask away. (Hint, hint.)
In Part I, club accounting expert Gene Rooks (for more on her background, see Part I) shared the first five of her 10 expert tips for terrific club treasurers. She also said, “If all club treasurers could get on this page, we wouldn’t have anything to do on the Treasurer forums.” (If you haven’t already done so, check out Part I.) Here are Gene’s final five:
6. Never use a separate petty cash account for expenses, or collect across the board funds posted as fees for expenses.
This was a new one to me. I would have assumed that the best way to cover incidental expenses would be from a club’s separate petty cash account. (In fact, if I’m not mistaken, I think that’s how my former club did it.) But, as Gene points out, it’s a big disadvantage to both the club and its individual members.
"First, club expenses for its operations are legitimate tax deductible expenses,” she says. “If they are paid out of a petty cash account separate from your regular accounting, they aren't being picked up in the Allocation of Income and Expense that is done by the accounting software. Your members are not getting the opportunity to use them as income tax deductions."
One way to handle this situation is to establish a cash account named “petty cash” in the accounting program. That’s one way to get around the drawbacks that a separate account creates, since you will be using funds contributed by members as payments, and the expenses are being picked up in allocations.
Even more important is that, if it is necessary to collect from members for expenses, the funds should be posted as payments toward additional units, not as fees. Club operational expenses should be paid out of normal club funds. Members should get unit value for anything they pay into the club.
One last point. When entering expenses for club operations, allocate them according to membership share. This distributes the expense by percentage of ownership, just like gains from sales are distributed in the software. Choosing to spread expenses out equally is not fair, as it takes away the same number of units from each member, so members with more units have an unfair advantage over those with a smaller share of the club.
7. Reconcile each and every month the club’s cash and shares on hand, including fractional shares, with your bank and/or broker.
According to Gene, if a club’s treasurer comes away from this column with just one tip – this one would be it. “It’s the most important part of the treasurer’s job,” Gene says. Each month, when the club’s bank and/or brokerage statements arrive, the club’s treasurer should reconcile them right away by comparing what the club’s computer software program is reporting against the latest statements. Don’t forget to include everything from cash on hand to stocks – even fractional shares that your club holds in a DRIP account.
Above all, don’t procrastinate. Not only will procrastinating make your job more difficult at year’s end (is there any drudgery like a mile-high pile of paperwork?), it will also compound any accounting errors you may have made along the way. “Lots of treasurers put it off until the end of the year,” Gene points out, “but if you’ve made an error along the way, you’ll have to go back through every statement to determine when you made the error. If you reconcile each month, you know that your accounts are in balance and you can go forward.”
8. Enter transactions in date order.
This, according to Gene, is just a good business practice. “Your software is less likely to give you an answer that’s off if you enter all of your information in date order,” she says. And, while it’s true that your software will correct itself going forward if you do find an error, when your transactions are out of order, your records are incomplete. This, in turn, can throw off your unit values.
While your unit values won’t be thrown off by large amounts, it can impact each member’s individual valuation statement – which could create a larger problem should a member wish to make a partial or complete withdrawal from the club.
9. Process withdrawals without delay, after all entries are current and the official valuation has been created or determined.
This, Gene points out, is one of the reasons why Tip #8 is so important. Too often, she says, clubs hold on to a member’s money as a form of “punishment.” “Members are not married to the investment club,” she says. “It’s an investment and they have the right to withdrawal from the club at any time.”
Payouts, Gene says, should be completed as part of the club’s business the following month. “It’s not fair to hold up a club member’s payout. A club should not sit on a member’s money for 60 or 90 days,” she says, pointing out that some of the older club partnership agreements allow 60 days or more to reconcile with the club member.
In order to properly process a club withdrawal, the treasurer needs to make sure that everything is up to date. Payout should take place the month following the next valuation. For example, if your club is meeting tonight and, at that meeting, a member announces his or her resignation, the payout should be based on the club’s next valuation. And the withdrawal should be processed as soon as possible after that. “All of this can be taken care of properly if the club is operating properly,” Gene says.
10. Make sure your books are in order for the annual audit and IRS tax filing as soon as the 1099s are received.
Club members are often impatiently waiting for the club treasurer to provide the K-1s so that they can file their individual taxes. But the treasurer can’t generate the K-1s until the brokers and banks send out their 1099s. So, club members need to keep this in mind and give the treasurer time to process the K-1 once the 1099s have arrived. That said, club treasurers need to make sure all of the accounting is current so that the K-1s can be processed immediately.
I want to thank Gene for sharing her words of wisdom and for all of her help with the first two columns in this series. Next time, I’ll be working with yet another expert to provide additional tips and insights for clubs and club treasurers. Again, if you’ve got a question – any question whatsoever – on the position of club treasurer, please be sure to post them on this forum. I look forward to hearing from you! |
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Herbert Barnett
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| 05/18/2008 5:43 PM |
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Here's an additional suggestion that could save treasurers a lot of aggravation.
With the changeover by banks and brokers to electronic transfers of checks, it is now routine for checks to be processed automatically, rather than having a real person enter the data. Unfortunately, the equipment to do this isn't foolproof. It is not uncommon to have checks recorded incorrectly, entered twice, or not at all.
I first noticing this when one of my monthly checks to the club was debited twice in my bank account. The broker and the bank corrected it, of course. It has happened several more times. Usually, the statements would not balance with my records, which made it easier to spot when I reconciled the books. However, two months ago one check was credited to the broker account twice, but their statement balanced with my club accounting records. After they deducted that extra amount the next month, we were out of balance by the amount of that check.
Fortunately, and this is the point -- I always scan all club members' checks before mailing them. By going through the statements, line by line, and comparing them with my check scans, I was able to find that another check in the same amount as mine had not been credited at all.
By sending the broker a copy of my check scans, we were able to get the problem corrected.
So I strongly recommend that if the treasurer has a scanner, all checks be scanned to a computer file and saved in case there is any dispute about member payments. A paper copier would work, but the scanner doesn't create a growing stack of paper copies. Small low-resolution jpg scans are adequate for this purpose. A letter-size flat-bed scanner can scan six standard-size checks at at time. If multiple scans are needed, zip all of the scans for a month into one file. I use a simple, standardized file-naming system that makes it easy to keep identify the scans by month.
This also points up the absolute necessity for reconciling the club's books accurately, *every month*. Out-of-balance errors that are not discovered until months later are much more difficult to find and fix.
Herb Barnett
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Gene Rooks
Gotha, FL (W. of Orlando)
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| 05/18/2008 6:10 PM |
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Excellent advice, Herb. Especially if you
have members who pay various amounts sometimes.
Gene
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Gene Rooks, Director
Space Coast Chapter
Accounting Instructor |
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Richard Lewis
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| 05/23/2008 10:59 AM |
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Amy,
This is just to let you know that there is "someone" out here reading your stuff. Personally, I haven't responded because, at the moment, I don't have any questions. I've been a treasurer for a number of years and I generally have gotten my questions answered by participating in the Treasurer's list that Gene, Rip and Ira monitor. Am I to assume that you have now joined that group?
Dick Lewis
GMIC |
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Gene Rooks
Gotha, FL (W. of Orlando)
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| 05/23/2008 11:05 AM |
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Dick, Rip, Ira, and myself and others also
monitor StockCentral forums, so you can post your questions here as well.
Amy is doing a fantastic job promoting club concerns on this forum, something BI
has long ignored to their detriment. I am waiting to see what the new
alliances recently announced are going to change in that regard.
Gene
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Gene Rooks, Director
Space Coast Chapter
Accounting Instructor |
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Amy Rauch Neilson
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| 05/23/2008 11:19 AM |
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Thank you, Gene!
Yes, Gene is correct -- my specialty is writing about investing and investment clubs and addressing their questions and concerns. My experience in this area goes all the way back to 1990, when I joined NAIC as Managing Editor of Better Investing Magazine. I've been writing about investing and investment clubs ever since.
I'm looking forward to hearing from club members and hope they will submit any and all questions that they have regarding any facet of investing and investment clubs.
Amy Rauch Neilson |
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Richard Lewis
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| 05/23/2008 11:49 AM |
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Gene,
Thanks for the comment. Maybe you can
offer a little insight into what's really going on. It's always been a
confusion factor as to the relationship between NAIC (which I guess is now is
BI) and Stock Central. There seems to be some overlap between these
two groups. Are they truly in competition with each other?
A year or so ago.... whenever it was that the
problems within NAIC became public knowledge, a number of NAIC members
chose to sever their membership with NAIC. Our club chose to not
renew our club membership, although some of our members renewed their personal
memberships. We are a club of 11 guys and some of us have joined Stock
Central. Others have retained their personal membership in NAIC. Can
you detail the advantages / disadvantages of joining either of these
groups? Our club president is working toward unifying our membership in
one or the other and you guys are a lot closer to the infighting between NAIC
and Stock Central than we are. Any information you can provide to help
us make this decision will be greatly appreciated.
Note: I'm copying our club president on this
email. Please cc: him on your reply.
Thanks,
Dick Lewis
----- Original Message -----
Sent: Friday, May 23, 2008 11:03 AM
Subject: ["Join the Club!" with Amy Rauch
Neilson]: Expert Tips for Club Treasurers, Part II: 4/24/2008
(291c974a-0555-41c2-abc7-7d6e5af58374)
From the "Join the Club!" with Amy Rauch Neilson forum at
StockCentral.com, GeneBR writes:
Dick, Rip, Ira, and myself and others also
monitor StockCentral forums, so you can post your questions here as
well. Amy is doing a fantastic job promoting club concerns on this
forum, something BI has long ignored to their detriment. I am waiting to
see what the new alliances recently announced are going to change in that
regard. Gene
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Posted by: GeneBR
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To view the complete topic, reply, or unsubscribe to this
topic please visit:
http://www.stockcentral.com/default.aspx?tabid=143&view=topic&forumid=296&postid=5670
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rip west
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| 05/23/2008 12:36 PM |
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<<
It's always been a confusion factor as to the relationship
between NAIC (which I guess is now is BI) and Stock Central. There seems
to be some overlap between these two groups. Are they truly in competition
with each other?
>>
Well, it is confusing. More so, because the roles keep
changing. At present, it seems to have settled down to this. BI is marketing
IClub's software for Club Accounting and ssg analysis. I believe they are also
marketing bivio's accounting software. So, in that sense, they are not in
competition.
Where the roles do overlap is in providing data files for
SSG software. Both organizations provide 10 year data files for preparing ssgs.
Either one of these, IMHO, is well worth the price. However, I see no advantage
in having both available. BI's magazine no longer fits my needs, so I have
dropped my BI membership, and belong only to Stock Central. It's something that
each individual and/or club has to decide on its own.
I hope this clarifies things a little.
Rip West
Saint Paul,
MN
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Gene Rooks
Gotha, FL (W. of Orlando)
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| 05/23/2008 1:02 PM |
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Dick, here is the text of the recent BI/IClub
agreement. A similar alliance has been made with Manifest Investing,
established by Mark Robertson after he left BI. It would seem bridges are
being built to tie them all together, for the mutual benefit of all, and to
avoid confusion among club members. There is an overlap in services
provided through StockCentral and the BI full premium membership, so many
members may still be confused as to which to use. The best answer is give
a trial run with both, and see which you find most useful to you. Your
president's Email didn't show up.
There are very good features in both of them, and
they are both using the same basic investment principles. Both provide
data service to populate Investors ToolKit. Both provide an online stock
study program, SC uses TakeStock and has a customizable stock screener, BI has a
more interactive, but less user friendly stock study program. BI has
recently started a First Cut feature of member contributed SSG's, and
StockCentral also has individual stock forums members are encouraged to submit
SSGs to for discussion.
Our club maintains basic club and member dues with
BI and get the BI magazine. At present, none use their premium data
and tools service, but several are using StockCentral for their data and
other online tools. Gene
Bonnie
Reyes Douglas
Gerlach BetterInvesting
ICLUBcentral, Inc. 248-583-6242, Ext.
449 617-491-3300,
Ext. 237 bonnier@betterinvesting.org gerlach@iclub.com www.betterinvesting.org
www.iclub.com Madison Heights, MI and Cambridge, MA – BetterInvesting and ICLUBcentral Inc., today announced a
multi-year Strategic Alliance Agreement to jointly market selected ICLUBcentral
products to BetterInvesting members, nationwide. The parties will also
work closely together in a number of other
capacities. BetterInvesting renewed its endorsement of several
ICLUBcentral products, including Club Accounting (formerly known as NAIC Club
Accounting), Investor’s Toolkit Version 5, Stock Analyst, Stock Prospector, and
NAIC Classic Plus. The Strategic Alliance Agreement calls for review of
additional ICLUBcentral products for endorsement in the
future. BetterInvesting
will actively promote the ICLUBcentral tools to its members using a variety of
marketing channels, including the BetterInvesting member website. In addition, a
program has been designed for ICLUBcentral to actively support BetterInvesting
chapters. ICLUBcentral
and BetterInvesting will coordinate efforts to maintain high customer support
standards, with performance measured using customer surveys and similar methods.
“With low savings rates, rapidly evolving global markets, and baby boomers
approaching retirement, there has never been a better time for empowering
Americans to invest wisely,” commented Douglas Gerlach, President of
ICLUBcentral. “This renewed partnership with BetterInvesting recognizes that
effective tools can play a significant role in that
process.” “It is an
important part of our mission to provide the best possible investing tools to
our members,” commented Bonnie Reyes, President of BetterInvesting. “This
agreement with ICLUBcentral effectively supports that
goal.” |
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Gene Rooks, Director
Space Coast Chapter
Accounting Instructor |
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Richard Lewis
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| 05/24/2008 10:37 AM |
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Thanks Gene. I think this helps a little,
although I still don't have a clear picture in my head. I didn't ask about
IClub. Where do they fit in?
Do you, Rip and Ira work for IClub, BI or Stock
Central? Is your mission to support all three of these
organizations?
Dick
----- Original Message -----
Sent: Friday, May 23, 2008 1:01 PM
Subject: ["Join the Club!" with Amy Rauch
Neilson]: Expert Tips for Club Treasurers, Part II: 4/24/2008
(291c974a-0555-41c2-abc7-7d6e5af58374)
From the "Join the Club!" with Amy Rauch Neilson forum at
StockCentral.com, GeneBR writes:
Dick, here is the text of the recent BI/IClub
agreement. A similar alliance has been made with Manifest Investing,
established by Mark Robertson after he left BI. It would seem bridges
are being built to tie them all together, for the mutual benefit of all, and
to avoid confusion among club members. There is an overlap in services
provided through StockCentral and the BI full premium membership, so many
members may still be confused as to which to use. The best answer is
give a trial run with both, and see which you find most useful to you.
Your president's Email didn't show up.
There are very good features in both of them, and
they are both using the same basic investment principles. Both provide
data service to populate Investors ToolKit. Both provide an online stock
study program, SC uses TakeStock and has a customizable stock screener, BI has
a more interactive, but less user friendly stock study program. BI has
recently started a First Cut feature of member contributed SSG's, and
StockCentral also has individual stock forums members are encouraged to submit
SSGs to for discussion.
Our club maintains basic club and member dues
with BI and get the BI magazine. At present, none use their
premium data and tools service, but several are using StockCentral for
their data and other online tools. Gene
Bonnie
Reyes Douglas
Gerlach BetterInvesting
ICLUBcentral, Inc. 248-583-6242, Ext.
449 617-491-3300,
Ext. 237 bonnier@betterinvesting.org gerlach@iclub.com www.betterinvesting.org
www.iclub.com
Madison Heights, MI and Cambridge, MA – BetterInvesting and ICLUBcentral Inc., today announced a
multi-year Strategic Alliance Agreement to jointly market selected
ICLUBcentral products to BetterInvesting members, nationwide. The
parties will also work closely together in a number of other
capacities. BetterInvesting renewed its endorsement of several
ICLUBcentral products, including Club Accounting (formerly known as NAIC Club
Accounting), Investor’s Toolkit Version 5, Stock Analyst, Stock Prospector,
and NAIC Classic Plus. The Strategic Alliance Agreement calls for review of
additional ICLUBcentral products for endorsement in the
future. BetterInvesting will actively promote the ICLUBcentral
tools to its members using a variety of marketing channels, including the
BetterInvesting member website. In addition, a program has been designed for
ICLUBcentral to actively support BetterInvesting
chapters. ICLUBcentral and BetterInvesting will coordinate efforts to
maintain high customer support standards, with performance measured using
customer surveys and similar methods. “With low savings rates, rapidly
evolving global markets, and baby boomers approaching retirement, there has
never been a better time for empowering Americans to invest wisely,” commented
Douglas Gerlach, President of ICLUBcentral. “This renewed partnership with
BetterInvesting recognizes that effective tools can play a significant role in
that process.” “It is
an important part of our mission to provide the best possible investing tools
to our members,” commented Bonnie Reyes, President of BetterInvesting.
“This agreement with ICLUBcentral effectively supports that
goal.”
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Posted
by: GeneBR
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To view the complete topic, reply, or unsubscribe
to this topic please visit:
http://www.stockcentral.com/default.aspx?tabid=143&view=topic&forumid=296&postid=5670
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Gene Rooks
Gotha, FL (W. of Orlando)
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| 05/24/2008 10:53 AM |
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Dick, StockCentral is IClub's data, forum, and
tool service. IClub also produces and makes the software (Toolkit, Club
Accounting, etc.,) that most investment clubs use, and that BI sells for
them. IClub's managment team has years of BI and investment club
experience.
Rip, Ira, and I don't work for any of the
above. For the most part, what we do is strictly voluntary to
support investment clubs and members in general, not the organizations
themselves, even though we have our own personal preferences.
I believe IClub from time to time have used Rip and
Ira's professional advice/services for consultant fees, but not as employees or
an ongoing basis.
Gene
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Gene Rooks, Director
Space Coast Chapter
Accounting Instructor |
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Richard Lewis
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| 05/24/2008 11:04 AM |
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So, Stock Central is a part of IClub..... and BI
is a totally separate group..... right?
Dick
----- Original Message -----
Sent: Saturday, May 24, 2008 10:52
AM
Subject: ["Join the Club!" with Amy Rauch
Neilson]: Expert Tips for Club Treasurers, Part II: 4/24/2008
(291c974a-0555-41c2-abc7-7d6e5af58374)
From the "Join the Club!" with Amy Rauch Neilson forum at
StockCentral.com, GeneBR writes:
Dick, StockCentral is IClub's data,
forum, and tool service. IClub also produces and makes the software
(Toolkit, Club Accounting, etc.,) that most investment clubs use, and that BI
sells for them. IClub's managment team has years of BI and investment
club experience.
Rip, Ira, and I don't work for any of the
above. For the most part, what we do is strictly voluntary to
support investment clubs and members in general, not the organizations
themselves, even though we have our own personal preferences.
I believe IClub from time to time have used Rip
and Ira's professional advice/services for consultant fees, but not as
employees or an ongoing basis.
Gene
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Posted by: GeneBR
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To view the complete topic, reply, or unsubscribe to this
topic please visit:
http://www.stockcentral.com/default.aspx?tabid=143&view=topic&forumid=296&postid=5670
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Gene Rooks
Gotha, FL (W. of Orlando)
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| 05/24/2008 11:59 AM |
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Correct, BI is a non-profit enterprise for the
propogation of wise investment principles established by George Nicholson
50 + years ago that work just as well today in the SSG format. Its
original premise was working through and providing educational materials for
investment clubs. With the advent of the computer, it became necessary to
provide software tools to facilitate both the stock analysis end, and the Club
Accounting process. BI is not in the software business, so the company
that is now IClub was brought in to develop and market these tools.
IClub is a for profit organization, developing and
producing software doesn't come free, and data services in particular don't come
free. Their management team is well qualified to come up with what works
for investment clubs and individual investors. BI also has a marketing
agreement with bivio, another for profit organization, that only provides club
accounting service.
IClub expanded their service to include an online
website including all the tools and forums you could wish, as an investment club
or individual investor, when it seemed BI was faltering and dropping the ball in
the care and feeding of investment clubs, in favor of a more general concept of
developing a member base of individual investors. Both of them need each
other, and clubs need them, as well.
I hope this clarifies things somewhat.
Gene
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Gene Rooks, Director
Space Coast Chapter
Accounting Instructor |
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rip west
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| 05/24/2008 12:05 PM |
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<<
I believe IClub from time to time have used Rip and
Ira's professional advice/services for consultant fees, but not as employees or
an ongoing basis.
>>
Slight correction. Not that it's of earthshaking
importance, but I am on a retainer from IClub for consulting services on an
ongoing basis.
Rip West
Saint Paul,
MN
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Gene Rooks
Gotha, FL (W. of Orlando)
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| 05/24/2008 12:14 PM |
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I wasn't sure of the content of the agreement with
Rip, but in addition to his extremely helpful support column on accounting
procedures for unusual security transactions on the IClub site, he
also is generous in his volunteer activity on all the various club discussion
lists. Gene
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Gene Rooks, Director
Space Coast Chapter
Accounting Instructor |
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Elisa S. Sawall
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| 05/25/2008 10:31 PM |
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| Thanks Amy for all the good information. I have been treasurer for a number of years and I am so glad that I got the club to switch to the online accounting software. It has been so helpful not to mention the support!!! Lisa Sawall, Dutchess Women's Investment Club |
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Amy Rauch Neilson
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| 05/25/2008 11:03 PM |
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Thank YOU, Lisa, for reading the Join the Club! columns and offering some feedback! It's great to know that you and your club have found the information to be useful -- and that you are happy with the Club Accounting Software as well as pleased with the support you've received from ICLUB! Don't miss Parts III and IV of the Treasurers' Series, which are already posted, as well as the final column in this series, Part V, coming June 5! In the meantime, please feel free to post any club-related questions you have. Best to you and your club,
Amy Rauch Neilson |
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