Every year, you open your Membership Campaign before the new season begins — and before your new accounting period starts. You want to attach these early memberships to the upcoming accounting period. This article walks you through how to do it.
Context: Early memberships
Let's take an accounting period running from September 1 to August 31 of the following year.
You open an early Membership Campaign in June to get ahead of the September rush. However, you want these memberships recorded under the accounting period that starts on September 1.
Recording early memberships as deferred revenue
These early memberships are treated as Deferred Revenue in accounting.
To learn more about deferred revenue and prepaid expenses, see this article: Recording deferred revenue / prepaid expenses
You have two options for recording them, depending on how many early memberships you need to handle.
Manually adding members
If you only have a handful of early memberships to manage, the easiest approach is to handle them directly through the transactions.
Make sure to first enable Deferred Revenue / Prepaid Expenses in Settings > Accounting. Scroll down the page and turn on the option to record Deferred Revenue and Prepaid Expenses.
When recording the membership (through the Membership Campaign), check the "Deferred portion" box and enter the payment method used before saving.
Also remember to link the transaction to a contact (whether newly created or already in your community) so you can find the membership on their profile. Simply type the first few letters of their name to search.
Forgot to check the box when recording the membership? No worries — you can edit this information later.
To do so, go to the transaction and click "View accounting entry" or "View payment details".
On the accrual entry (the first one), click Edit, then check "Deferred". Enter the amount before clicking Save.
Large number of early memberships (>100)
If you have a large number of early memberships — collected before the new accounting period opens — it's more efficient to use a Journal book entry at the end of your sign-up campaign and before closing your accounting period.
For example, let's say you have 1,000 membership entries at $10 each, collected between June 30 and August 31. Your accounting period ends on August 31 and the next one opens on September 1. Those 1,000 membership entries totaling $10,000 must be recorded as Deferred Revenue for the accounting period starting September 1.
Go to Accounting > Book entry > Journal book entry and enter the following two entries (click +New record to enter the second group of entries):
- Last day of the accounting period
- Debit: account 756 - Membership = $10,000
- Credit: account 487 - Deferred revenue = $10,000
- First day of the next accounting period
- Debit: account 487 - Deferred revenue = $10,000
- Credit: account 756 - Membership = $10,000
This would look something like this:
Click Save.
These entries will then appear in accounts 487 and 756 (you can find them via Accounting > Documents > General Ledger or Accounting > Documents > Journal > Journal type: Miscellaneous Operations).
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