ESTABLISHING
A CHART OF ACCOUNTS
by W:.Tim Bryce, PM,
MPS
timb001@phmainstreet.com
Palm Harbor, Florida, USA
"A Foot Soldier for Freemasonry" This week I want
to discuss something a little different: accounting.
Now before
you yawn and go to sleep, the reason I want to discuss this is because I
am surprised
whenever I find basic bookkeeping to be sloppy in a Masonic Lodge or any
other
nonprofit organization. We have to remember, the people charged with
performing
such tasks are volunteers who are not necessarily blessed with an accounting
background. Nonetheless, there are some simple practices that should be
observed
in the basic accounting of money. The larger Lodges seem to grasp the
concept
of financial accounting better than the smaller ones. Regardless, all
Lodges have a
fiduciary responsibility to its membership that finances are to be
accurately managed
and reported.
Whether you are in a Masonic Lodge or in a commercial business,
financial accounting
begins with a Chart of Accounts which defines how money will be debited
and credited
and, as such, should be regarded as a precursor to defining a budget or
operating
a bank account. A Chart of Accounts is simply a taxonomy of how money
will be
accounted for in a Lodge. It can be either as extensive or as short a
listing as required
by a Lodge. Either way, I prefer a numbered accounting system which
offers precision
in accounting money, whether you control it manually or with computer
assistance,
such as with Intuit's Quicken or MS Money.
The following is a sample Chart of Accounts which you are free to use at
your
discretion. By no means should it be considered a universal listing
that will
accommodate all Lodges. Instead, it should be regarded as a "started kit"
for you to tailor to the nuances of your own Lodge.
INCOME
1000 - DONATIONS & FUND RAISERS
1005 - Building Fund
1010 - Endowment Fund
1015 - General Fund
1020 - George Washington Memorial
1025 - Grand Master's Charity
1030 - Grand Master's Official Visit
1035 - Help a Brother Fund
1040 - Local/Civic Charities
1045 - Masonic Charities (General)
1050 - Masonic Home
1055 - Masonic Medical Research Fund
1060 - Relief (Sickness/Distress)
1065 - Scholarship Fund
1070 - Worshipful Master's Projects
1100 - MEMBERSHIP INCOME
1105 - Annual Dues
1110 - Assessments
1115 - Back Dues & Fees
1120 - Perpetual Membership
1125 - New Member Initiation
1200 - MISCELLANEOUS
1205 - Advertising
1210 - Bank Charge Refund
1215 - Dividends
1220 - Interest
1225 - Investments
1230 - Loans
1235 - Lodge Rental
1240 - Masonic Merchandise
1245 - Miscellaneous Income
1250 - Sales Tax
EXPENSES
2000 - Administration
2005 - Bank Service Charge
2010 - Bank Charge (other)
2015 - Bank Transfer
2020 - Dues Notices
2025 - Licenses, Permits
2020 - Miscellaneous
2035 - Office Equipment (incl. Computers)
2040 - Office Supplies (incl. Computers)
2045 - Printing, Trestleboard newsletter
2050 - Printing, all other
2055 - Pins, Badges, Certificates
2060 - Postage Bulk Rate Permit
2065 - Post Office Box
2070 - Postage, General
2075 - Postage, Trestleboard newsletter
2080 - Professional Services
2085 - Refund Dues
2090 - Secretary's Fee
2095 - State Sales Tax
2100 - PROPERTY MAINTENANCE
2105 - Building Supplies
2110 - Cable (R-TV)
2115 - Cleaning Supplies
2120 - Fire Extinguisher Service
2125 - Garbage Disposal
2130 - Gas Utility
2135 - Kitchen Supplies
2140 - Insurance
2145 - Insect/Pest Control
2150 - Internet Service Provider (ISP)
2155 - Lawn Maintenance
2160 - Plumbing
2165 - Power/Electricity
2170 - Repairs, General
2175 - Roofing
2180 - Telephone
2185 - Tools & Equipment Repair
2190 - Water & Sewer
2200 - GRAND LODGE
2205 - Filing Fees
2210 - General Charges
2215 - Grand Lodge Supplies
2220 - Per Capita Tax
2225 - Travel Grand Communications
2230 - Travel Wardens Retreats
2400 - SOCIAL FUNCTIONS
2405 - Awards
2410 - Funeral Expense
2415 - Lodge Officer Installation
2420 - PM's Apron
2425 - Refreshments
2430 - Supplies, Dinner & Parties
2435 - Subcontractors (incl. caterers)
2500 - MASONIC EDUCATION
2505 - Books
2510 - Masonic Supplies
2515 - Masonic Uniforms/Costumes
2520 - Subscriptions
2525 - Training
2600 CHARITIES & FUNDS (Expense)
2615 - Building Fund
2620 - George Washington Memorial
2625 - Endowment Fund
2630 - Grand Master's Charity
2635 - Grand Master's Official Visit
2640 - Local/Civic Charities
2645 - Masonic Home
2650 - Masonic Medical Research Fund
2655 - Relief (sickness/distress)
2660 - Reserve Fund
2665 - Lodge Scholarship Fund
2670 - Misc. Charity
2675 - Worshipful Master's Projects
2700 - PROPERTY IMPROVEMENT
2705 - Building Mod/Imps
2710 - Lawn & Garden Supplies
2715 - Tools & Equipment Rental
2800 - PR & PUBLICITY
2805 - Advertising
2810 - Dues Civic Associations
2815 - Promotional Events (incl. parades)
2820 - Promotional Materials
These accounts are used primarily for two purposes:
- To establish the Lodge's budget on a spreadsheet (to include both
planned income
and expenses).
- Recorded on all vouchers for payment or for deposit and,
subsequently, are recorded
in either the bank check book and/or the accounting software.
The Chart of Accounts, thereby becomes the cohesive bond that ties the
budget
to the Lodge's accounting. Too often I have seen Lodges who treat the
budget
and the bank accounts as separate entities. Inevitably, this leads to
inconsistent
results (e.g., the budget says one thing, the bank accounts say
something else).
Fortunately, most of today's accounting software has the ability to
manage both
(assuming you have a Chart of Accounts in place). After the budget has
been
established, it is easy to input it into the accounting software; from
there, the
software can generate up-to-date reports on actuals versus budgeted.
Regardless of
the implementation, the Chart of Accounts is designed to synchronize all of
your finances. Its simple and it works. If you are not using a Chart
of Accounts,
I would suspect your annual audit can best be described as clumsy at best.
This essay may not have been as stimulating as some of my others, but it is
every bit as important. Managing financial resources for a nonprofit
organization doesn't require a rocket scientist, just a little commonsense.
Keep the Faith.
NOTE: As with all of my Masonic articles herein, please feel free to
reuse them in
Masonic publications or re-post them on Masonic web sites (except Florida).
When doing so, please add the following:
Article reprinted with permission of the author and
"http://www.fremasoninformation.com"
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