The first step in planning for the chapter’s financial system is the development of a workable chart of accounts. A chart of accounts is, as the name implies, a separation by category of all the main sources of income and expense. A numbering system is usually established for the various categories.
On the next page, you will note that the 100-200 series is assigned to summarize categories (i.e., cash in bank, accounts payable, etc.). Numbers in the 100s are assigned to positive categories (money on hand or due) and numbers in the 200s are assigned to negative categories (accounts payable, etc.). The 400 series is assigned to various categories of income. The 500 series refers to various categories of direct expense, and the 600 series to various categories of administrative expense.
A chart of accounts is used as a (n):
1. index to all accounts used
2. list of code numbers for ready reference
3. aid in using a uniform accounting system
4. aid in preparing budgets and reports
Each chapter may have special categories. Some categories in the attached chart will not be needed by chapters, but whatever the special needs may be, the chart of accounts forms the basis for all future accounting of the chapter.
The chart of accounts and the budget become the key of the system. Ledger paper containing enough columns to reflect chart of account categories should be used to record income and expenses. Income is recorded on one page and expenses on another. The total of the money received and the source (members name etc.) should be recorded. These totals should then be entered in the proper column by category. Income columns should be totaled each time a deposit is made and they should be clearly marked as a deposit. The amount of the deposit and the total of the columns should agree. Each column on each page should be totaled and “cross totals” done. When cross totals and income totals agree you know no error in recording was made. If they do not agree a search should be performed to find the error.
Suggested Chart of Accounts
Assets
100 cash in bank
101 petty cash
102 savings
103 other assets
104 accounts receivable
120 furniture and equipment
130 depreciation
140 prepaid expenses
NOTE: tracking prepaid expenses is necessary to keep financial records on an accrual basis as the national society does.
Liabilities
200 accounts payable
201 federal tax payable
202 state tax payable
203 notes payable
220 income over expenses
230 equity
Income
400 dues
410 meetings
420 publications
430 contributions
440 CVP week/novelties
450 interest
460 miscellaneous
Expenses
500 general and administrative
500.1 equipment rental
500.2 office supplies
500.3 telephone
500.4 postage
500.5 general printing
510 meetings
520 publications
530 accounting/legal fees
540 travel/lodging
550 bank charges
560 miscellaneous
NOTE: You may get as detailed as you want or require in your chart of accounts. This sample chart is simply meant to guide you in basic accounting principles.
ACVP Online Chapter Planning Guide – REVISED 06/2017