Da Demo Club

Reimbursing a Member With Units

Chris AndersonDa Demo had a recent expense for renewing their DBA name registration with their county. Justin Martinez paid it with his personal funds and now the club needs to reimburse him.

Justin is glad to be reimbursed with units in the club rather than a check. Here are the steps Chris Anderson, Da Demo's treasurer, will use to record the transactions involved.

Accounts Page

The actual cash to pay this expense did not come from the club brokerage account, so Chris will use a temporary account to record the transactions and make them part of the club accounting.

He has already used the "Create" button on the Accounting>Accounts page to create the temporary account. He's named it "Reimbursements".

The DBA renewal is a deductible club expense. There are two entries Chris needs to make.

  1. Enter the club expense
  2. Enter the reimbursement in units

Step 1 - Recording the expense

Deductible Expense Reimbursement Step 1

Chris uses the Expense Button on the Accounting>Accounts page to open a form to record the expense. He records it as having been paid from the temporary "Reimbursements" account.

Negative Balance in Reimbursements Account

After the expense is recorded, he notes there is a negative balance in the "Reimbursements" account.

Step 2 - Reimbursing the member with units

Payments Link on the Members page

To record Justin receiving $10 worth of units to reimburse him, Chris goes to the Accounting>Members page and selects the "Payments" link next to Justins name.

Reimbursement Payment Entry

He fills in the member payment form as shown. He selects "Reimbursements" as the account the Payment is deposited into.

Zero Balance in Reimbursements Account

After the payment is recorded, the balance of the temporary "Reimbursements" account has returned to zero.

The End Result

When the entries are completed, $10 has been withdrawn from the club to cover the DBA renewal expense. Since Justin paid it, the $10 has been used to reimburse him with units of ownership in the club.

You can see all the entries in the club accounts if you go here and scroll down until you get to 9/05/2014 entries.