User Transactions
When users sign up for membership or renew an existing membership, register for an event, make a donation, purchase merchandise, incur a miscellaneous charge, etc., a user transaction is generated.
A user transaction represents a commitment to pay in return for some benefit. So from the club’s standpoint, one side of a user transaction is an Accounts Receivable. The other side of the user transaction represents a positive balance in one or more Income accounts.
The example membership sign-up transaction actually represents revenue in three Income accounts (therefore a Credit): membership dues, merchandise sales, and donations. The other side of the transaction is an increase in Accounts Receivable that is a current asset account (therefore, a Debit.)
In QuickBooks®, you will likely have separate income accounts for each type of income, allowing you to track income from different sources.
Similarly, ClubExpress allows you to organize different types of income into financial accounts and you can map each financial account into a corresponding QuickBooks® account.
Exporting user transactions to QuickBooks® generates credits in the appropriate income accounts and debits in your Accounts Receivable account. Members and non-members are treated as “Customers” in QuickBooks®; they are the people who purchase the products and services provided by your club or association. When you import or a user transaction, both versions of QuickBooks® also generate an open Invoice for the customer.
User Credits
When users are credited for an event they were not able to attend or because they volunteered, they are given a User Credit.
User Credits represent a loss of revenue to the club and, more specifically, to an income category. An event credit is a reduction in revenue for that event, while a membership credit is a reduction in membership revenue.
One way of looking at a credit is to consider it as a future obligation or liability incurred by the club—perhaps an Account Payable. But QuickBooks® does not allow Accounts Payable to be linked to customers, only to vendors. Instead, QuickBooks® handles credits as a reduction in Accounts Receivable, or the money owed by a customer.
When a membership credit of $10.00 is issued, the membership income account is reduced by this amount (Debit) and the Accounts Receivable account is reduced by the same amount (Credit to Current Asset.)
In ClubExpress, you must specify a financial account and item name when entering a credit.
User Credits are sent to QBO when they are issued or given to the user, not when they are used.
- Applied as part of a payment.
- Refunded to the user. We do not export refunds since the credit is already in QuickBooks®. Instead, we assume that the credit is offset by a check cut by the club’s treasurer in QuickBooks® to the user.
- Deleted. We cannot export deleted credits since there is nothing to export. Instead, you need to create a transaction in QuickBooks® to reverse the deleted credit.
- Waived by the user. We export this as a reversal of the transaction above, crediting the Income account and debiting Accounts Receivable. Effectively, the club recovered the “loss” of the credit.
In QBO, credits are imported as Credit Memos.
User Payments
When users make a payment, they are satisfying an open Receivable. A user payment causes a balance to be transferred from one asset account (Accounts Receivable) to another asset account (Bank or Undeposited Funds).
Accounts Receivable had a balance of $57.00. This is offset by a credit (reduction) so the balance is now zero. Bank now has a balance of $57.00 because the payment represents money that was actually received.
In QuickBooks®, you will have a separate account for each bank account. Similarly, ClubExpress allows you to map each bank account in the system to a corresponding QuickBooks® bank account. QuickBooks® also supports the concept of Undeposited Funds, money which has been received but which may not yet physically be in your bank account.
Exporting user payments to QBD generates Payment transactions, credit balances in Accounts Receivable and a debit balance in the appropriate bank account or in Undeposited Funds. Note that the customer’s open invoices are NOT flagged as paid. There is no way for us to automatically match them so the treasurer will need to handle this task manually. (Note also that the customer/member will have a zero balance if he or she is up-to-date on payments.)
In QuickBooks®, different types of payments are handled in different ways:
- If the collected funds were received by ClubExpress (using the built-in merchant account or if you are configured for checks to be sent to us) and later remitted to you, you have the choice of showing the funds in a bank account or in Undeposited Funds.
- If the collected funds were received directly by your club (using cash, a check to the club, or processed through a separate system), the export places the funds in Undeposited Funds. When you actually make the deposit, you can generate a transaction to move these funds from Undeposited Funds to the appropriate bank account(s).
- If the “payment” was recorded as a Comp or Write-Off (Bad Debt), Accounts Receivable is credited and the specified Expense Account for Bad Debts/Comps is debited for this amount. Writing off or comp’ing an expected payment is an expense to the club.
In ClubExpress, if a payment includes an applied credit, we record a deposit for the gross amount less the credit amount because it was separately exported.
Note that the payment type and a reference number will be shown where appropriate. In most cases, there is only one payment type per transaction. For checks, the record will say “Check” and will include the check number. For credit cards, the record will say “Credit Card” and include the last 4 digits. If the payment includes multiple payment methods (for example, credit card and check, or check and discount or credit) the payment type is “Multiple Payment Methods”; there is no way to include the details of each payment method.
Transferring user payments to QBO usually generates Payments against Open Invoices, which will be flagged as paid for invoices created after you connected ClubExpress to QBO. The exceptions are payments made by discount coupon, Comp, Write-Off, or “Received by Subgroup”, which are imported as Journal Entries. We do not link these to an invoice.
Club Transactions
When we charge a fee, the funds are deducted directly from your bank account using an ACH. Similarly, when we issue a credit, the funds are deposited directly into your bank account using an ACH.
Club Transactions are handled using a Debit to an Expense account (the expense increases) offset by a Credit to the primary bank account (the amount on deposit is lowered.)
ClubExpress allows you to specify your QuickBooks® account name for each category of expense, for example: setup fees, monthly hosting fees, miscellaneous charges and credits, postage, etc. In QBO, club transactions are recorded as Journal Entries.