Monthly closing procedures

Created by Tim Atkinson, Modified on Mon, 15 Aug 2022 at 01:58 PM by Tim Atkinson


The objective of the monthly close is to ensure that all transactions are correctly distributed so that it is easier to measure progress vs. budget, and assess our true financial position at month-end.

Like year-end closes the key tools are:

  • Prepaid expenses
  • Deferred revenue

The primary concept is "revenue recognition" - that is recognizing revenue in the month in which it is appropriate rather than in the month in which it is received.

NOTE: The accounts are divided between NYSVMS State-wide activities and Chapter activities. The Chapter Activities are in "other revenue" and "other expense"
ONLY the NYSVMS activities run on a monthly revenue recognition basis
The Chapter activities do not have monthly recognition

State Dues - Monthly Recognition
All State dues are paid into a deferred revenue account.
Each month a journal entry is made as shown below

The formula used - which is recorded in the memo line is
Total dues collected $169345 (recognized) + $343822 (deferred) = $513167
Amount to be recognized = 513167*5/12 = 213820 or Total collected x number of months/12
For the month 213820 (total to be recognized) -169345(already recognized) = $44,474

Prepaid Expenses and Revenue Recognition Events

Any revenue received for an event in advance of an event should also be placed in deferred revenue - but must be able to be separated from deferred dues revenue.This includes conference revenue - such as any sponsorships received directly, and also sponsorships related to specific events such as Hall of Veterinary HealthAny expenses for events should be put into pre-paid expenses until the month in which the event occursThis is particularly important for anything spent on the conferences.

Integrated Chapter Annual Dues Recognition

Once the new annual membership campaign starts on Oct 1, all integrated chapters also need to be deferred.
This requires a journal entry with a line for each chapter equal to the amount of dues received that month for that chapter

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