CLUB TREASURER TRAINING

Michele KimreyTexas District Treasurer 2010-2014

What are your Responsibilities?

So, you have been elected as treasurer…

◦Club Finances◦Collect funds due Club◦Deposit collected funds◦Disburse funds as directed by Board

◦Keep complete and accurate records of all financial transactions

◦Present report of finances at Board Meetings

◦Get tax returns prepared as required by IRS

◦Obtain an annual audit or review

You are Important!

So where do I begin????

July 1through

June 30

FISCAL YEAR of CLUB:

1. Obtain copy of the minutes showing that you have been elected to the office.

2. Make a trip to the bank. a. Coordinate with other signersb. Take the minutes – fill out

appropriate formsc. Give change of address, if

neededd. Debit or Credit Card?

Here are your first steps:

3. Obtain financial records:

1. Checkbooks 2. Deposit Slips / Deposit Stamps3. Past Year’s Financial Reports4. Tax ID Number 5. Method of Financial Recording 6. Bank & Accounting Websites7. Passwords & User IDs 8. Policies and Procedures 9. By-Laws of the Club

Remember: The Secretary is the custodian of the records of the Club. Past years’ finances should be kept by the Secretary, but it is wise to keep the previous fiscal year handy while you are learning and getting familiar with the accounts.

Let’s learn some terminology:

Now that you have your tools…

501(c)(4) Non- Profit Organization that does NOT have to pay taxes on money received.

That means you have a tax exempt status with IRS as a Non-Profit Organization and do not have to pay taxes on money received.

Donating to a 501(c)(4) does NOT allow the donor to write-off the donation to an Exchange Club. (There are a few exceptions, but Exchange Clubs do not fall within those IRS guidelines.)

You are not allowed to participate in or intervene with any political activity to promote any candidate or opposing candidate.

501(c)(3)Organization

Very few Exchange Clubs are this type of organization. There are a few differences from the 501(c)(4)

◦Donations are a tax write-off to the donor in most cases

◦Must provide donor with a receipt for the amount of donation or a receipt for the value of the donation if the donation is at least $25.

◦Must be a corporation, fund, foundation or community chest and follow rules of these types of organizations.

1. Invoice and Statement2. Assets and Liabilities3. Chart of Accounts4. Balance Sheet5. Profit & Loss Statement (P &

L)6. Budget7. Accounts Receivable8. A/R Aging Report

Other Terms:

DUTIES TO PERFORM EACH MONTH:

1. Pay bills in timely manner2. Reconcile Bank Accounts3. Make deposits at least 2 x month4. Prepare Financial Statements one day

before Board MeetingP & LBalance SheetBudget vs. ActualsAging Report on Dues

Make a formal copy to give to Secretary to file with Minutes from each Board Meeting

5. Prepare Statements and send to Members who still owe dues on the first of the month

DUTIES TO PERFORM QUARTERLY:

1. Prepare Invoices to send to Club membership for dues

2. Send out invoices 15 days prior to the first day of each quarter. (Unlike invoices, statements are sent monthly beginning on the first day of the quarter and on the first day of each month until paid.)

3. Turn over unpaid dues accounts to person designated by Board for Collection Calls.

JULY 1OCTOBER 1JANUARY 1

APRIL 1

CLUB QUARTERS

NOVEMBER 15 - IRS TAX FORM 990, 990 EZ, or 990-N DUE WITH COPY TO NATIONAL

MAY – BOARD SELECTS A COMMITTEE TO PERFORM AUDIT OR REVIEW OF FINANCIAL RECORDS AND PREPARE NEXT YEAR’S BUDGET

JULY – AUDIT FINDINGS MUST BE REPORTED TO BOARD OF DIRECTORS BY TREASURER

EXCHANGE CLUB FISCAL (TAX) YEAR IS JULY 1 THROUGH JUNE 30

DATES TO REMEMBER

1. Two Bank Accounts2. Dues are to be paid in advance3. Membership classifications defined 4. Transfer and Re-Instatement rules5. Audit or Review no less than annually and

reported at first Board Meeting each year

ALSO, DON’T FORGET TO REFER TO YOUR BLUE BOOK!

THE BY-LAWS ARE YOUR FRIENDS!

What account would you post it to? Operating or Fundraising

Your club wants to devote a portion of its fundraising to development of leadership and education. Is that doable?

What is the maximum percentage your Board should elect to go towards Education from your Fundraiser Funds?

Should you write a check if instructed by the President for funds that were not budgeted or not approved by the Board of Directors?

QUIZ TIME:

Due by November 15 of each year – if the 15th falls on a Saturday, Sunday or legal holiday it is due the next business day

Most Clubs can file a 990-N (e-Postcard). Filing Requirement is: Annual Gross Receipts are normally $50,000 or less ($25,000 for tax years ending after December 31, 2007 and before December 31, 2010)

A Club that fails to file 990-N for three consecutive years may lose their tax exempt status.

A Club may choose to file a 990 or 990-EZ instead of 990-N, if so desired.

IRS FORM 990

To file the 990-N you will need…

Tax ID Number Tax Year Ending Date June 30,

20## Club’s Legal Name and Mailing

Address Name and Address of a Club

Officer Website Address (if applicable)

TO FILE YOUR CLUB’S 990-N, VISIT THE WEBSITE:

epostcard.form990.org

990-EZ can be filed by Clubs with gross receipts of less than $200,000 and total assets of less than $500,000 at the end of their tax year.

If a Club does not meet the criteria for filing a 990-EZ or N, then it must file a 990.

990-EZ and 990 have failure to file penalties against Club and responsible person (that’s you TREASURER!)

More on 990’s …

501(c)(3) and 501(c)(4) by law must have open books. As a non-profit organization, your books are up for review by IRS, other members, other Clubs, the District, National, and non-members.

Non-Profits need

transparency

SALES TAX EXEMPT FORM

PASS THRU GRANT FORM

FORMS YOU MAY USE

National Exchange Club Foundation Pass

Through Grant Form

EXAMPLES OF FINANCIAL REPORTS:

Chart of Accounts

Imaginary Club Chart of Accounts for XYZ Exchange Club of Texas follows:

◦Gives you an example of what accounts a club might have

◦Grows with Club as needs arise◦Can make accounts mid-year when needed◦Club should have an income account and

expense account for projects and programs◦Each Club will have a different set of

accounts, because each Club has different programs and expenses

CLUB Chart of Accounts

EXAMPLES OF FINANCIAL REPORTS:

Profit and Loss Statement

How much did the Club make and spend? Also called the Income Statement. It summarizes your income and expenses for each income or expense account on your chart of accounts, so you can tell

if you’re operating at a profit or a loss.

EXAMPLES OF FINANCIAL REPORTS:

Balance Sheet

What is my Club worth? This report is a financial snapshot of your Club. It lists the balances for each asset, liability, and equity account as of a

specific date. It also calculates what your Club is worth (the equity) by subtracting what your Club owes (liabilities) from everything it owns (assets).

EXAMPLES OF FINANCIAL REPORTS:

Member Accounts Receivable (A/R) Aging Report

How much does each member owe and how much is overdue?

EXAMPLES OF FINANCIAL REPORTS:

Budget vs. Actuals

What are the variances against what is currently budgeted?

Budget gives a guideline for how money is to be spent and the projections for how the money will be funded.

Budgets are not set in stone. They will change and evolve as needs arise determined by the Board of Directors.

Budget should be formulated in last quarter of the fiscal year for the following year and presented to the Board of Directors at first meeting in July to adopt.

BUDGET

National Exchange Billing:1. Dues: $18.50 per Active, Active-Honorary and

At-large Members$50.00 per Business Member$8.00 per Honorary Member$9.25 per Collegiate and Excel Members

2. Convention Fee: $25.00/club3. Crime Insurance4. General Liability Insurance5. D & O Insurance (optional)6. Special Event – Liquor Liability (optional)7. Cyber Liability (optional)

(Excel and Collegiate Clubs are billed semi-annuallyin October and January)

What will you have to pay every quarter as a club treasurer?

District Billing:

Districts bill based on the number of club members reported by National as of the last day of the quarter

Each District has it own billing procedures based on the By-Laws of that District.

PLEASE GET YOUR MEMBER DROPS REPORTED TO NATIONAL THE WEEK BEFORE THE END OF THE QUARTER TO AVOID GETTING INVOICED FOR THEM.

Requirements: (application to National by August 1)

1. Files IRS Form 990, 990EZ , or 990-N by November 15

2. Maintains current accounts with both District and National

3. Prepares formal annual budget4. Maintains separate activities and

operating accounts5. Has audit performed

Distinguished Treasurer You Rock!

AUDITS

Each year an informal audit or a review is required by the By-Laws

The Committee/person(s) performing the audit will need the following:

∙ General Ledger∙ Opening & Closing Bank Statements∙ Any Board minutes where a financial

decision was made∙ List of current officers

They are a good thing!

Advantages:1. Gives transparency to the Club’s finances2. Easy to Use – don’t need an accounting

background and FREE support when need help3. Officers, Board of Directors, Accountants and

anyone the Club desires can have access to financial information

4. Only designated persons can make changes (max of three in addition to Account without additional charge)

5. Makes reports easy!

QuickBooks On-Line Plus

-National will send you anIRS Letter of Determination

-Your Club needs to obtain from the County in which Club resides an Assumed Name Affidavit

-Fill out application for tax exempt status with state’s Comptroller of Public Accounts

-Obtain IRS Employer Identification Number (done by National in POM application)

-Determine where you want to bank

New Clubs

-Determine who will be signers on accounts; will there be debit cards issued and to whom

-Get copy of Minutes from Board Meeting establishing Treasurer, Name of Bank, and Signers on Account

-Schedule time to meet at Bank and fill out forms. Remember to take copy of Minutes, By-Laws, IRS Determination Letter, Assumed Name Affidavit, and IRS Employer Identification Number for Club. You will be asked to fill out a W-2 for the bank.

If you run into a brick wall, you can call your District Treasurer for help.

Or you can call National Exchange Club.

800-924-2643

Michele Kimrey

michele.kimrey@gmail.com

NEED HELP?

QUESTIONS

Thank you!