I'm not an accountant or an attorney either. But I've been a manager and
I've caught people stealing from various cash sources. I can attest,
that if you don't track it tightly, even with access control, it will
magically walk away at some point.
Not treating PayPal like an account in your books is asking for trouble.
That's a pile of money that can flow back and forth from and to various
sources and is 'invisible' to the books in that case. That is the very
antithesis of 'accounting'.
For the issue of using cash for disbursements, that is the point of a
petty cash account. (otherwise, it is just 'undeposited funds') Some
organizations as part of their control and accounting mechanisms require
disbursements over a certain amount ($5 is not unusual) to be by check.
Some make it iron clad for any amount. This greatly simplifies cash
handling, tracking and accounting and in such a case, the physical cash
the organization receives is usually handled by a single person. (a good
idea in general)
As for dating transactions, I wouldn't alter anything unless the law
specifically allowed for it. Otherwise, I might reconsider using Accrual
instead of Cash basis if it became a repeated issue.
Regards,
Adrien
On 7/25/20 12:03 AM, w...@theprescotts.com wrote:
I have a few comments on this long post. I will preface it by admitting that I
am neither a tax attorney nor an accountant. I have kept my personal accounts
in GnuCash for many years. I am the treasurer for two non-profits, or more
accurately, two subsidiaries of one non-profit. But neither of them are legal
entities nor in the US. Legally, they are probably more akin to informal
associations.
The suggestions for falsifying the dates of transactions for convenience in
accounting strike me as very bad advice. Is it even legal for an organization
that has to abide by US tax laws.
Similarly, I don't understand the advice to just treat Paypal transactions as
if they were directly on checking. This would make accounting for Paypal fees
strange. For organizations outside the US, Paypal no longer holds funds; they
transfer them immediately, so the Paypal balance is always zero except for
immediately after a deposit to Paypal. Even so, it is much easier to track
activity treating Paypal as a bank account.
Finally, I don't understand the suggestions about not having a cash account and
immediately depositing all cash to checking. Perhaps it is partly because I
live in a country where many transactions are still done with cash, where no
one uses checks, just bank transfers. But I often accept donations in cash, and
often pay bills in cash. Not accounting for those transactions directly would
be neither accurate nor convenient.
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