Entering Investment Club Member Withdrawals

A complete or partial distribution of assets from your club is called a withdrawal and must be entered by filling in the member withdrawal form. You can find it if you click on the Withdraw button on the Accounting>Members page.

You should make sure you do not fill in this form, tell a member what they are owed or pay a withdrawal until you are sure your bivio records are updated and correct through the date of the withdrawal. This means you can't make a correct withdrawal entry until the withdrawal transaction and valuation date have passed. So, for example, a withdrawal with a transaction date of 9/13 and a valuation date of 9/12 won't be able to be entered correctly until 9/14.

The following information is entered on the Withdrawal form:

  • Transaction Date-The date the withdrawal is effective and the member is no longer a part of your club (full withdrawal), or his ownership is adjusted (partial withdrawl). As of this date, there will be adjustments to the number of units a member owns and a change in the way he or she is allocated club club income and expenses.

    If you will be actually paying the member on a different date, enter the withdrawal as paid from a Temporary "Pending Withdrawals" account. When payment is actually made, enter it as a transfer from your financial account to the Pending Withdrawals account to close it out.

  • Member Valuation Date-The date on which the withdrawal unit value is established.

    Note that this is not the date the withdrawal is effective. That is the transaction date.

    This unit value will be multiplied by the number of units the member owns on the transaction date to determine the total value that the member is owed. When you click on the Refresh button you will see the amount displayed.

    If you are transferring appreciated stock, the shares being transferred will also be valued on this date. It is used to set the number of shares of each stock to transfer.

    Note that your accounting and withdrawal payout values are based on stock closing prices in bivio. The price your broker shows for shares on any particular date is not what is used to calculate withdrawal payouts.

  • Account- If the withdrawal is to be paid immediately (recommended), this will be the account which you will use to write any check you will need to payout the withdrawal. As noted above, if there will be a delay paying the member, this should be a "Pending Withdrawals" account.
  • Amount- Select either Full Withdrawal or Partial Withdrawal. If Partial Withdrawal is selected, enter the gross amount to be withdrawn, including any withdrawal fees.
  • Withdrawal Fee- If your club charges a withdrawal fee , enter it either as a cash amount or as a percentage. If you enter the withdrawal fee as a percentage be sure to place a "%" after the numerical value.
  • Type-If the withdrawal is to be paid entirely with cash select Cash as the type of withdrawal.

    If the withdrawal is to be paid all or in part with appreciated stock, select Stock as the type of withdrawal.

  • Click on OK
  • If Stock was selected as the type of withdrawal a page will open where you can select the number of shares of each one to be transferred. The market price per share and the number of shares are shown for each.

    If you don't want to transfer all the shares of any particular stock, you have two choices. You can elect to select specific Lots to be transferred or you can use the default selection method which is First In First Out.

    To select specific lots, click on the "Lots" button. This will open the Investment Lots page. It shows the clubs cost basis per share for each lot.

    Note: You should only select different lots if you have told your broker, usually in writing, specific lots that are to be transferred. This needs to be done prior to making the transfer.

Once you are done, click OK at the bottom of the page.

You will be asked if you wish to continue to let a withdrawn member have access to the club account. If you would like to have your members have access to get their tax forms,view club data and continue to receive club emails, be sure to check the correct response.

When you've finished entering the withdrawal, all your accounting entries are made for you and a withdrawal report is generated. You can find the report if you go to Accounting>Reports. You'll see a link at the bottom of the report list for Withdrawal Reports. Make sure to give a copy of this report to the withdrawing member. It contains tax information he'll need for his personal taxes that is not reported to him on any other form.

Member withdrawals are the most complicated transaction a club has to make. You can find out more information about making them here . We suggest you review this material prior to telling any member what they will receive and prior to making any withdrawal entries.

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