Why do payments for next year's Dues that are made in the fourth quarter of this year show up in this year's budget.
Groupable:m2 finances are set up to comply with IRS regulations for cash-based accounting. On a cash basis, the IRS states that all income received in a year period belongs in that year. For example, income received in December 2019 stays in 2019, whether it is for dues 2020 or 2021 prepaid.
You won’t be changing that data for 2020 dues received in 2019, and the IRS 990 filed by yourself or parent organization will be accurate.
This may be a change from how prior years operated, or from how the prior secretary taught you. Groupable:m2 is set up on a cash basis to assist in filing that 990 for the IRS.
If you have any additional questions about the cash-basis accounting process, or if you think you run on an accrual-based accounting process, please direct these questions to your accountant or parent organization.
More information for transitioning your record-keeping, and what is generally-accepted accounting principles (GAAP)?:
According to accepted accounting principles payments received in a calendar year apply as income in that year. So, if you bill 2020 dues in 2019 and receive payments in 2019 they are 2019 income. This is how the IRS does it, how GAAP (generally accepted accounting principles) says it should be done, and how MORI does it when doing cash based accounting.
So, the first year you do this it will seem strange. In the future all of it will balance out because you will have income in the current year from dues for the next year, and likewise the same thing will happen in future years. It all balances out in the end. We arrived at this methodology after much research and questioning of CPAs on the best practices and what is acceptable to the IRS for lodge dues income.
To illustrate this even further lets say you had someone who was NPD pay their arrearage for say 10 years ago. You wouldn't go open the old budget period to record that as income on the ledger for an accounting period that was closed some years ago. The same principle works in reverse. Income for next years dues received and deposited to the bank is cash income in the current period.
We do have a report that can show you receipts by billed year so you can see that information and have exact numbers on how much income was received based on each years dues.