Accounting Software for Homeschool Groups

 

Does your homeschool group use software to manage it’s finances?

It’s something you should consider. Carol Topp, the HomeschoolCPA, discusses when you should use software and offers  her opinion on software that’s best for homeschool groups.

 

In the podcast Carol mentioned:

QuickBooks Online. You may be eligible for a free version of QuickBooks Online. I wrote about it here: Use QuickBooks Online for free

Wave Accounting. I set up a small nonprofit on Wave recently. It’s working for them and it’s free!

Aplos Software which is popular with nonprofits and churches.

Ace Money Lite free personal finance software

 

Featured resource
Carol Topp, CPA has written a book just for homeschool treasurers:

Money Management in a Homeschool Organization

  • Does your homeschool group manage their money well?
  • Do you have a budget and know where the money is spent?
  • Do you know how to prevent fraud?

This 115 page book will help you to open a checking account, establish a budget, prevent mistakes and fraud, use software to keep the books, prepare a financial statement and hire workers. Sample forms and examples of financial statements in clear English are provided.

 

Carol Topp, CPA

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Why Your Homeschool Group Needs to Do a Bank Reconciliation

 

Is your homeschool group reconciling your bank account every month? You should be!

Carol Topp, the HomeschoolCPA, explains why bank reconciliation is the most important task you should do to manage your group’s finances. But don’t let your treasurer balance the checking account! It should be someone else. Listen to the podcast to understand why.

 

 

Featured resource

Carol Topp, CPA has written a book just for homeschool treasurers:

Money Management in a Homeschool Organization

  • Does your homeschool group manage their money well?
  • Do you have a budget and know where the money is spent?
  • Do you know how to prevent fraud?

This 115 page book will help you to open a checking account, establish a budget, prevent mistakes and fraud, use software to keep the books, prepare a financial statement and hire workers. Sample forms and examples of financial statements in clear English are provided.

Carol Topp, CPA

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Preventing Fraud in Your Homeschool Group: Separation of Duties

What’s the best way to to prevent fraud or mistakes in the finances of your homeschool group?

It’s called separation of duties and Carol Topp, the HomeschoolCPA explains why your treasurer should not be doing all the financial tasks in your homeschool organization. In this 12 minute podcast episode Carol explains how you can separate and share the money management tasks.

 

In the podcast Carol mentioned a list of suggestions to prevent fraud.

Excerpt from Money Management in a Homeschool Organization on preventing fraud (opens as a pdf)

 

Featured resource

Carol Topp, CPA has written a book just for homeschool treasurers:

Money Management in a Homeschool Organization

  • Does your homeschool group manage their money well?
  • Do you have a budget and know where the money is spent?
  • Do you know how to prevent fraud?

This 115 page book will help you to open a checking account, establish a budget, prevent mistakes and fraud, use software to keep the books, prepare a financial statement and hire workers. Sample forms and examples of financial statements in clear English are provided.

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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Is a surplus added to next year’s budget?

Carol,
When does extra money from the previous year’s budget get added into the new year’s budget? Our treasurer  dumped all the leftover money from our prior year into the new year. I am pretty sure that isn’t supposed to happen. The way she has it, it looks as though we have $1,200 more to spend in next year than we really do.
Am I right to think that we have to base our budget with just dues that we hope to get in the coming year?
Angela

 

Angela,

Technically, a surplus (leftover money) never gets added to the next year’s budget. The surplus stays in your checking account (as an asset) and is reflected on the Balance Sheet (as the balance in the checking account), not as part of next years’ revenues.

In accounting we have two major financial statements: the Statement of Revenues and Expense (sometimes called Profit and Loss) and the Balance sheet which shows what you own (the assets) and what you owe (the liabilities).

Of course your board should have a plan for your surplus. Maybe it stays as an emergency fund or as the deductible on your insurance policy or is accumulated for a big future purchase (like equipment or a building). Some boards like to have the treasurer put a footnote on the Balance Sheet about money is kept in reserve and it’s purpose, so it doesn’t get spent. Or they move some money into a saving account, so it is less likely to be spent.

Something like this:

Balance Sheet as of DATE
Assets
Checking Account $5,400.00
Savings Account* $1,550.00
Total Assets $6,950.00

*Savings set aside for:
Emergency fund: $1,000
Insurance deductible: $500
Saving for science equipment: $50

“Am I right to think that we have to base our budget with just dues that we hope to get in the coming year?” I think that is wise fiscal management to live within your means each year.

My book Money Management in a Homeschool Organization would be very helpful to your treasurer.

Carol Topp, CPA
HomeschoolCPA.com

Is my homeschool graduation fundraiser breaking the law?

Hi Carol,
The past 3 years we have held a graduation. The graduate families have been doing the fundraising, with the amount earned going into our checking account and then paid out for speakers, food, programs, and etc. I am concerned after reading your book Money Management in a Homeschool Organization: A Guide For Treasurers that we have been doing this all wrong!
 Are we instead supposed to fund raise as a whole group, and have graduation as a budgeted item in place of creating the graduation fund in our checking account?
Thank you so much for all your help!

Heidi,

 

Heidi,

The fundraising to pay for the graduation expenses is fine. The fundraiser proceeds are going to an event that your homeschool organization operates, not to individual families.

What is prohibited by the IRS is private inurement which is when an organization earmarks fundraiser proceeds as belonging to specific families to defray their specific and particular expenses. That’s a no-no. The purpose of those fundraising monies to to further your exempt purpose (homeschooling), not to give a financial break to specific, individual families.

There was a homeschool group that showed me their spreadsheet of about 10 fundraisers(!) and the 20 families that participated and how each dollar of profit from the fundraiser was divvied up to each family. Yikes! It was a record-keeping marvel, but prohibited by the IRS! I warned them to cease and desist immediately.

I think the graduation event should be included in your budget with both the revenues (parents paying money and the fundraisers proceeds) and the expenses (speakers, food, programs, etc) recorded.

 I hope that helps,
Carol Topp, CPA

 

 Learn more about managing money and IRS tax exempt status for your homeschool organization

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How can I thank my volunteers?

 

It’s the end of your homeschool organization’s school year and you want to thank your volunteers. They work so hard, so you hand out generous gift cards as thank you gifts. You may have just created a tax liability for your volunteers! Carol Topp, CPA, the Homeschool CPA discusses ways to thank your volunteers that are tax-free.

Listen to the podcast

 

Do you have more questions about volunteers and paying workers? I spent at lot of time doing research so that homeschool leaders will know if they are paying their volunteers, board members, and workers legally and correctly. It’s all in this new book:

payingworkerscoveroutlined

Paying Workers in a Homeschool Organization-2nd edition

$9.95 paperback
130 pages
Copyright 2017
ISBN 978-0-9909579-3-5

BuyPaperbackButton

 

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Can my homeschool group collect money now that’s for next year?

 

Many homeschool groups collect deposits in the spring for next fall’s programs. This helps with determining how many families will be returning. But how should these early deposits be recorded in a homeschool group’s bookkeeping? Carol Topp, CPA the HomeschoolCPA offers some ideas.

 

Listen to the podcast

In the podcast Carol mentioned a handout that explains how to record early deposits in accounting software like QuickBooks.

Here it is: Deferred Revenue in QuickBoooks (pdf)

Do you have more questions about managing the money in your homeschool organization?

MONEY MANAGEMENT FOR HOMESCHOOL ORGANIZATIONS: A GUIDE FOR TREASURERS

  • Does your homeschool group manage their money well?
  • Do you have a budget and know where the money is spent?
  • Do you know how to prevent fraud?

This 115 page book will help you to open a checking account, establish a budget, prevent mistakes and fraud, use software to keep the books, prepare a financial statement and hire workers. Sample forms and examples of financial statements in clear English are provided.

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Understanding Taxes for a small homeschool business

It’s tax season and I’ve been getting several emails from homeschool business owners, especially Classical Conversations directors, about how to fill out their tax returns.

The IRS has a terrific website called Understanding Taxes that explains how to fill out a simple business tax return.

It’s quite good. I’ve used their simulations when I taught personal finance at my homeschool co-op

Visit these websites to learn how to fill out your Schedule C Business Income and Loss.

Understanding Taxes home page

Simulation of filing a simple business tax return using Schedule C-EZ

Simulation of filing a simple business tax return with a 1099-MISC (this simulation would be helpful for a Classical Conversation tutor who receives a 1099-MISC).

 

You could also try searching Youtube for helpful videos on preparing a business tax return. Here’s one I found:
How to Fill Out Schedule C for Business Taxes He goes over the Schedule C line by line in about 20 minutes.

 

I hope that helps,

Carol Topp, CPA

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