Understanding How Memberships Are Recorded in Accounting

In Springly, all modules are connected to one another. This means that when you record a membership under Community > Memberships, a book entry is automatically generated. This article walks you through the accounting impact of a membership.

In this example, we're recording Perrine's membership for $50, with a first payment of $20 in cash and a second payment of $30 by check.

When a membership is recorded, one or more book entries are generated:

• The first is tied to the membership itself.
• The subsequent ones are tied to each payment.

The first entry is linked to the membership: it credits account 756 (memberships). In this example, account 756 is credited $50.

There are then two scenarios: either a person is linked to the membership, or no one is. In the first case, account 467 (user account) is debited; in the second, account 411 (account receivable) is debited. In this example, account 467 is the one affected.

Here's what this line looks like in the Journal.

Until the full payment has been collected, Perrine's membership will appear in the accounts receivable list.

Each time a payment is recorded, a new entry is created. The intermediary account is credited for the amount paid. In this example, account 467 is credited $20.

The account debited depends on the payment method used:

• Cash payment: account 531 (petty cash)
• Bank payment (credit card, wire transfer, direct debit…): account 512 (bank)
• Check payment: account 511200 (checks pending deposit)
• Online payment: account 517 (e-wallet)

In this example, account 531 is debited $20.

Here's what the payment line looks like in the Journal.

Since the payment hasn't been made in full, the membership still appears in accounts receivable, but the amount already paid is shown.

Next, we record the second and final payment. The intermediary account is again credited for the amount paid. In this example, account 467 is credited $30.

The account debited again depends on the payment method. In this example, Perrine paid by check, so account 511200 is debited $30.

Here's what the membership and both payments look like in the Journal. Since the membership has been paid in full, it no longer appears in accounts receivable.

You can find all your memberships under account 756 in other accounting reports:

The General Ledger:

The Profit and Loss:

And the Statement of Financial Position: