CLUB TREASURER TRAINING Michele Kimrey Texas District Treasurer

What are your Responsibilities?

◦ 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

July 1 through June 30

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 signers b. Take the minutes – fill out appropriate forms c. Give change of address, if needed d. Debit or Credit Card?

3. Obtain financial records: 1.Checkbooks 2.Deposit Slips / Deposit Stamps 3.Past Year’s Financial Reports 4.Tax ID Number 5.Method of Financial Recording 6.Bank & Accounting Websites 7.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:

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.

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 Statement 2. Assets and Liabilities 3. Chart of Accounts 4. Balance Sheet 5. Profit & Loss Statement (P & L) 6. Budget 7. Accounts Receivable 8. A/R Aging Report

Invoice - A non-negotiable bill issued to give a detailed list of services with an account of all costs, and provides the dates of service and due date for payment. Statement – A periodic summary of account with a beginning date and an ending date. Usually provided monthly, showing the balance owing. This is not a bill. Assets and Liabilities – An asset is anything of economic value owned by an entity and a liability is a debt or an obligation that legally binds an entity which it must pay. Chart of Accounts – A list of account names and sub-accounts arranged in the order in which they customarily appear in the financial statements. Balance Sheet – A financial statement that summarizes at a specific period in time an entity’s assets, liabilities and net worth. It is sometimes called the Statement of Financial Condition.

 Profit and Loss Statement (P&L) – A statement showing earnings (income), expenses, and net profit. The P & L statement shows transactions over a given period of time, whereas the Balance Sheet gives a snapshot on a specific date.  Budget – An itemized summary of estimated or intended expenditures for a given period of time along with proposals for financing them.  Accounts Receivable – The Money that is owed the entity by others. Accounts receivable are current assets that are expected to be paid within a short amount of time.  A/R Aging Report – A report that groups accounts receivable balances according to how long they have been outstanding, usually reported with current, 30 days, 60 days, 90 days, and over 120 days.

DUTIES TO PERFORM EACH MONTH: 1. Pay bills in timely manner 2. Reconcile Bank Accounts 3. Make deposits at least 2 x month 4. Prepare Financial Statements one day before Board Meeting P & L Balance Sheet Budget vs. Actuals Aging 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: 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 1 OCTOBER 1 JANUARY 1 APRIL 1

 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

1. Two Bank Accounts 2. Dues are to be paid in advance 3. Membership classifications defined 4. Transfer and Re-Instatement rules 5. 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!

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?

 Due by November 15 of each year – if the 15 th 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.

 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!)

 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

National Exchange Club Foundation Pass Through Grant Form

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

 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.

 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/club 3. Crime Insurance 4. General Liability Insurance 5.D & O Insurance (optional) 6.Special Event – Liquor Liability (optional) 7.Cyber Liability (optional) (Excel and Collegiate Clubs are billed semi-annually in October and January)

 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 Maintains current accounts with both District and National 3. Prepares formal annual budget 4. Maintains separate activities and operating accounts 5. Has audit performed

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

Advantages: 1. Gives transparency to the Club’s finances 2. Easy to Use – don’t need an accounting background and FREE support when need help 3. 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!

-National will send you an IRS 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

-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  Michele Kimrey

Thank you!