Are you Confused by your Homeschool Group’s Financial Reports? Webinar for you!

Are you confused by the financial reports from your homeschool group?

You’re not alone!

In this short podcast episode (8 minutes)  Carol Topp, the HomeschoolCPA, will tell you about a webinar she is hosting on Monday October 29, 2018 at 8 pm ET.

Financial Reports for Homeschool Groups: The Good, the Bad and the Ugly

In the podcast Carol mentioned how to register for the webinar.

There is no charge for the webinar but a payment is gladly accepted to offset the cost of hosting the webinar.
https://Paypal.Me/CarolTopp/5 to pay $5.00
https://Paypal.Me/CarolTopp/10 to pay $10.00

The webinar will be recorded, so please Register so that you will be emailed the link to the video.

Like handouts? Here’s a helpful handout: Financial Reports Webinar Handout (pdf)

 

Do financial reports confuse you?

Has this happened to you?

You are at your homeschool leaders meeting. The treasurer hands out a paper showing the group’s financial status. It’s confusing, hard to read, and has weird dollar signs and labels.

You’re too embarrassed to show your ignorance about the report, so you don’t ask any questions.

Neither does anyone else.

You’re wondering, “Am I the only one who finds this confusing? No one else asked any questions, so they must get it. I’ll just keep quiet and hope for the best.”

Good news! The problem isn’t you!

It’s probably the way the treasurer is displaying the financial report.

 

I’ve seen all kinds of financial reports from homeschool groups. Many are very confusing and difficult to understand (and I’m an accountant!).

This prompted me to offer a webinar for homeschool group leaders on how to present financial reports that are clear and easy to understand to board members.

During this webinar you will learn:

  • What are the two most important reports for your board to see regularly
  • What mistakes treasurers make
  • How to read a financial report
  • Know what red flags to look for
  • Know if your organization is healthy or doing poorly
  • How to a better manager and leader
  • Use the financial report to make decisions and set goals.

You will be shown the good, the bad and the ugly of financial reports.

Join me on Monday October 29 at 8 pm ET, 7 pm CT, 6 pm MT and 5 pm PT for a one-hour webinar

Financial Reports for Homeschool Groups: The Good, the Bad and the Ugly

 

(There is no charge, but a payment is gladly accepted to offset the cost of hosting the webinar).
https://Paypal.Me/CarolTopp/5 to pay $5.00
https://Paypal.Me/CarolTopp/10 to pay $10.00

The webinar will be recorded, so please Register  so that you will be emailed the link to the video.

The advantages of attending live:

  • Time for your questions and answers from Carol (Carol charges $75/hour for a private phone consultation)
  • Interact in the chat room with other homeschool leaders
  • It will get done! I know you have good intentions to watch the video later, but sometimes it just doesn’t happen.

Register now and join us on Monday October 29, 2018 at 8 pm ET, 7 pm CT, 6 pm MT and 5 pm PT

Like handouts? Here’s a helpful handout: Financial Reports Webinar Handout (pdf)

Carol Topp, CPA

HomeschoolCPA.com

Webinar: Financial Reports for Homeschool Groups

 

I’ve seen all kinds of financial reports from homeschool groups. Many are very confusing and difficult to understand (and I’m an accountant!).

So I am offering a webinar for homeschool group leaders on how to present financial reports that are clear and easy to understand to board members.

During this webinar you will learn:

  • How to read a financial report
  • Know what red flags to look for
  • What are the two most important reports for your board to see regularly
  • What mistakes treasurers make
  • Use the financial report to make decisions and set goals.

You will be shown the good, the bad and the ugly of financial reports.

 

Join me on Monday October 29 at 8 pm ET, 7 pm CT, 6 pm MT and 5pm PT for a one-hour webinar

Financial Reports for Homeschool Groups: The Good, the Bad and the Ugly

(no charge but a payment is gladly accepted to offset the cost of hosting he webinar).
https://Paypal.Me/CarolTopp/5 to pay $5.00
https://Paypal.Me/CarolTopp/10 to pay $10.00

The webinar will be recorded, so please Register so that you will be emailed the link to the video.

The advantages of attending live:

  • Time for your questions and answers from Carol (Carol charges $75/hour for a private phone consultation, so this is a bargain!)
  • Interact in the chat room with other homeschool leaders
  • It will get done! I know you have good intentions to watch the video later, but sometimes it just doesn’t happen.

Register now and join us on Monday October 29, 2018 at 8 pm ET, 7 pm CT, 6 pm MT and 5 pm PT

Like handouts? Here’s a helpful handout: Financial Reports Webinar Handout (pdf)

Carol Topp, CPA

HomeschoolCPA.com

QuickBooks tip for homeschool groups: Sales

 

Here’s a  tip for all you homeschool groups using QuickBooks (or something similar like Apolos or Wave)

In the homeschooling world don’t usually think of our members as “customers” but that’s what QuickBooks calls them.

Members = Customers

We also don’t think of collecting registration dues or field trip fees as “sales” but that’s what QuickBooks calls it when you collect money and provide a service.

Registration Fees = Sales Income

Field Trip fees = Sales Income

Co-op Class fees = Sales Income

You should set up several categories on your Chart of Accounts for different types of Income. You may want to change the titles of Income accounts in QuickBooks to match your program. So instead of “Sales” Use “Program Income” or just plain “Income”

Make use of subaccounts under Income for things like

  • Membership dues
  • Co-op Tuition
  • Field Trips Income
My book Money Management in a Homeschool Organization  has some tips for using Quickbooks like setting up a Chart of Accounts and a who are your “Customers” and what are your “Sales.”

Carol Topp, CPA

HomeschooCPA.com

 

 

Do CC Directors pay for their own children’s tuition?

Karen, a homeschool leader involved in Classical Conversions asked,

Do Classical Conversations (CC) Directors have to write a check (to themselves) for full tuition for each of their kids?

No. A CC Director does not have to pay her own business tuition for her own children. 

Here’s why:

CC Corporate wants a Director to pay their licensing fee based on student enrollment/tuition collected, so a CC Director should track the total tuition collected INCLUDING HER OWN CHILDREN. That way she is paying CC Corporate the correct amount.

But for tax purposes, a CC Director DOES NOT write her business a check for her own children’s tuition and does not include her child’s tuition in the income reported on her tax return (I’m assuming the Director is operating her business as a sole proprietorship and is not an employee of her own business).

The reason is that a person should not be taxed when they avoid paying for services by providing the services to themselves. It’s called imputed income. There was a court case in 1928 that ruled that the imputed income from produce grown and eaten by a farm owner is not taxable as income to the farmer.[9]

Conclusion: A Director must keep track of the tuition she would owe for her children so that she pays CC Corporate the correct licensing fees, but she does not need to write a tuition check to her business and she should not report her child’s tuition as taxable income on her business tax return.

Carol Topp, CPA

HomeschoolCPA.com

My book Taxes for Licensed Classical Conversations Directors is available through Classical Conversations. Find it  in the Directors Licensing Guide  page 54, Appendix M and click on “this document.”

Homeschool leaders summer reading: Money Management in a Homeschool Organization

 
This summer I’m encouraging homeschool leaders to take time to become a better leader by reading through my books. This week I’m featuring my book,

 

When I originally published this book in 2008, it was a short 40 page ebook and had a horrible cover.  I was still learning and self-publishing was brand new!
MoneyMgmtCover
An update was badly needed and I tackled that project in 2014. The book ballooned to 131 pages and I subtitled it “A Guide for Treasurers.” I feel like I poured my CPA brain into this book.

 

Cover Money Mgmt HS Org
 Topics covered in this book include:
Chapter 1: Your Treasurer is a Gem!
Chapter 2: Checking Accounts Done Right
Chapter 3: Super Simple Bookkeeping Basics
Chapter 4: Show Us Your Books! Regular Reporting on Financial Status
Chapter 5: Establish a Budget: You’ll Thank Me Later
Chapter 6: Get What’s Coming to You: Collecting Fees
Chapter 7: Do I Have to Report This? Reimbursement Policies and Avoiding Taxes
Chapter 8: Using Software to Stay Sane
Chapter 9: Fraud: It Couldn’t Happen to Us
Chapter 10: Need More Money? Easy Fundraisers for Homeschool Organizations
Chapter 11: Risky Business: Insurance for Homeschool Groups
Chapter 12: Paying Workers: Hiring Employees and Independent Contractors
Chapter 13: Homeschool For Profit: Running a Homeschool Group as a Business

 

 

 

Carol Topp, CPA

 

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Q&A: Adding another program under your homeschool group’s umbrella

Super Bowl LII is over. Did your team win? Perhaps your homeschool group is considering adding football team.

Tricia, a treasurer if a homeschool program in Texas asked questions here and here about adding a football program. The homeschool group has 501(c)(3) status with the IRS.

She had several questions about tax exempt status and financial oversight.

  1.  What steps with the IRS do we need to follow to bring them under our homeschool group’s tax exempt umbrella?
  2. What forms would we need to file?
  3. Would they share our tax ID number or would they need their own?  What are concerns should we consider in doing this?
  4. The benefits to our members are obvious, but we don’t want to overlook concerns if there are any.  They would handle their own bank account, but how much would we need to manage?

 

Tricia,

I read your 501(c)(3) tax exempt application given to the IRS and see that sports teams was part of your mission. That’s good, because you do not have to approach the IRS and ask for permission to add the football program; it was included in your original tax exempt application.

Here are my answers to your questions:

1. When you file your 990 or 990-EZ Annual Information Return with the IRS, you simply list the football program as one of your programs. If your gross revenues are under $50,000 per year, you’ll file the simple Form 990-N and no explanation is required.

2. There are no additional forms to file beyond the annual Form 990/990-EZ or 990-N. That’s because sports teams was part of your mission in your original tax exempt application.

3. Use your main group’s EIN (tax ID number). The football program is just another activity run by the main group, so you should expect the typical concerns such as: Are they following policies, being careful, keeping good financial records and practices, etc? My book Money Management in a Homeschool Organization can help in this area.

4. Your main organization should have oversight of the football program’s bank balances. This includes allowing you, as the main group’s treasurer, access to their bank account online and require they give you a monthly bank reconciliation report and monthly reports of the income and expenses.

This may be a lot of extra work for you as a volunteer treasurer, so you may need to hire a bookkeeper or recruit more help from volunteers.

Tricia asked her questions by email. I can do that  for your homeschool program, but it is very time consuming to read and reply to emails. I charge a reduced rate of $50/hour to read and reply to emails. Or perhaps a phone call would be better. Contact me to arrange a private phone consultation.

Carol Topp, CPA

 

Fraud in a homeschool group

HandsWithCash

 

I received a phone call from a homeschool support group leader that broke my heart. She had just learned that her treasurer had embezzled over $10,000 from her group during the past two years. Her tale was heartbreaking as she spoke of what painful lessons she had learned and how to go forward.

The leader saw a few things that tipped her off:

  • The treasurer’s business income had taken a recent financial hit making his personal finances in trouble.
  • No budget was created.
  • The treasurer was not detailed oriented.
  • The treasurer did the bank reconciliation, so no one else saw the bank statements.The checkbooks was kept locked in the treasurer’s business office and frequently inaccessible.
  • The leader had a difficult time getting the treasurer to write checks to members for expenses.
  • The treasurer was married to the vice chair, who was a close friend of the leader, so the leader was reluctant to confront her friends.
  • The board was small and few people were willing to volunteer, making the leader desperate and grateful when anyone said they would serve as treasurer.

Here is what the group is doing now:

  • Consulting with a lawyer about criminal prosecution.
  • Pursuing restitution from the treasurer.
  • Using a bank account with on-line access for visibility.
  • Having someone besides the treasurer do  the bank reconciliation.
  • Creating a budget.
  • Amending bylaws and policies to add accountability. The treasurer will be required to make financial report at every meeting.

I hope you never face a similar situation.

To prevent fraud in your homeschool group, follow the practices mentioned above and in my book Money Mangement for Homeschool Organizations which you can order from the Bookstore page.

I also offer an excerpt from the book, a list of Recommended Financial Practices in the Chapter titled Fraud: It Couldn’t Happen to Us. It’s so important that your homeschool group put in place good financial oversight that I’m offering that part of the book at no charge.

Carol Topp, CPA

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Homeschool field trip leader wants checks written to her (or she’ll quit!)

From looking at your book, Money Management in a Homeschool Organization, it appears that all field trip money should be run through the group’s account. Checks should be made out to the group, any cash receipted, then one check going out to pay for the field trip. This seems to be a real hassle, especially since trip attendance can change the day of the trip due to illness, etc.

After a year of not having field trips, a committee was put together, so now some are on the calendar. It was my belief that the above needed to be practiced. The leader refused. She wants the money paid to her, checks preferred, no receipts. This is how she operates another large homeschool prom she coordinates for another set of people. I was on the field trip team for years. This has never been done before! If we do not do it her way, she won’t do field trips.

I am new as Treasurer. I don’t know if we can do that, legally.

The other question it brings up is putting those field trips in our yearbook (we do a yearbook each year of our sports, activities, field trips). If they are not really functions of our group (which is what the leader is saying), can they be in yearbook? If they are in yearbook, does the money need to be run through the account and all that hassle?

Thank you so much!
Karen M Treasurer

 

Karen,

Thank you for contacting me. I’m glad to see you have read my book Money Management in a Homeschool Group  and are trying to be compliant with good money practices.

Yes, all field trip money should go through your homeschool group’s bank account. But in reality, sometimes it is easier to collect cash on the day of the event and pay for the field trip that day with cash. I understand that. But, as much as possible, if checks are collected they should be made out to your organization and deposited in the organization’s checking account.

It greatly concerns me that your field trip volunteer is demanding that checks be made out to her. That is a red flag! It looks suspicious. She is trying to direct money that belongs to your group to her (that’s called embezzlement!). Tell her that your group does not do things in an improper way just because another group does it that way. You are seeking to implement good financial practices and that means no checks for funds that that belong to the organization are written to a volunteer (i.e., her).

Tell her that if checks are written to her then:

1. It is personal income to her and needs to be included on her personal tax return (!) and
2. If checks are written to her then your homeschool organization is not sponsoring the trip and your insurance will not cover the event. Her personal insurance must cover the event (Get her to agree to #1 and #2 in writing!) and
3. If the checks are written to her, then this is not sponsored by your group and should not have your group’s name associated with the field trip or include it in the group’s yearbook.

This is less a legal issue than a moral, ethical problem. If a volunteer insists on checks written to her personally and threatens to quit her volunteer job if you don’t comply with her demands, you have an ethics problem.

I am concerned that her behavior and demands sound as if she is trying to embezzle money. Have nothing to do with her, at least as far as handling money goes.

If she threatens to quit leading field trips consider yourself fortunate!

For more help in managing the money in your homeschool group get my book Money Management in a Homeschool Organization or listen to these podcasts:

How to Handle Reimbursements

Can a Homeschool Group Collect Money Now for Next Year?

What Homeschool Leaders Don’t Know About Fundraisers

Carol Topp, CPA

P.S. I will be unavailable from October 24, 2017 through November 5, 2017. I will be on a long-desired trip to Israel, walking where Jesus walked! Thank you in advance for your patience as it will take me some time to catch up after I return.

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Simplify your homeschool group fees (please!)

Carol,

Our all volunteer homeschool co-op charges fees for several things:

  • A $20/family registration fee.
  • A $12/family fee to pay a cleaning crew for cleaning.
  • The building usage fee is $40/student/school year.
  • A $4 PayPal fee per transaction.

Then some of the class teachers charge a supply fee or require the parents to purchase books, etc.
Is there a way to simply these fees?
Emily

 

Emily,

I’ve seen lots of homeschool groups with complicated fee structures. There are separate fees for the facility, the supplies, the insurance, the website, etc. The list of fees on the parents invoice is 5-6 separate lines!

Something like this is invoice overkill!

You don’t need to be this complicated with all the separate fees!

Most preschools, private schools, colleges,  etc. include all their fees into one tuition fee charged to parents. (Okay, I  know that colleges love to charge lots of fees for supplies, etc. and then can claim they are not increasing tuition!)  The school adds up all the expenses to operate their program and charge the parents enough to cover those expenses (that’s why a budget is so important). They lump everything into one bill to the parents called “tuition.”

Instead, just lump it all the fees into one fee, call it student fees or “tuition,” if you like. The parents do not need to see all the details of what goes into running the organization; that’s what the board does. The budget is the place to list the expenses and see if the tuition charged is enough to cover all the expenses.

Simpler invoice to send to parents. All fees lumped together.

P.S. About the Paypal fee you’ve been charging…Paypal forbids you tacking on an extra charge to cover their fee. It’s in the User Agreement your organization agreed to when you signed up for a Paypal account. It says, “You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method.” So just roll that fee into your total fee charged to parents.

Why You Can’t Charge Clients Paypal Fees + What to Do About It.

Carol Topp, CPA
HomeschoolCPA.com
Helping homeschool leaders

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