We need to make some decisions about funding the "Grex Store". The concept behind the store is to sell Grex insignia items as a way to raise money for Cyberspace Communications. They'd be offered through a web page and whatever other way we can think of. Rob Argy has come up with a nice design that we are using in our first run of items (it'd probably be cool to introduce new designs from time to time). Currently we have: - sweatshirts (screen printed) - t-shirts (screen printed) - mugs (photographically printed) - mousepads (photographically printed) My understanding is that with the T-shirts and sweatshirts, we save money by making larger orders, while the mugs and mousepads don't have quantity discounts. Even without quantity discounts, it's useful to order them in slightly larger batches since it saves handling time. Because of these factors, we should probably try to maintain an inventory of various merchandise. However, we obviously don't want all our money tied up in merchandise inventory. We certainly want to maintain some money in our back account for emergencies and such like. How should we determine the amount of money to invest this way? Do people have other ideas on how to more effectively manage the store? Are there volunteers to help manage the store?78 responses total.
I would be willing to volunteer to manage the store, especially from my home if possible.
It seems to me that about 20% of our current unclaimed savings (that is, money that won't be needed to pay a bill or finish an upgrade in the near future might be a place to start.
THat sounds about right to me.
I'd like to see the store be financially self-sustaining. The general fund could (has) gotten it started with a $750 initial "loan". Did that include the mousepads and mugs? What if that initial stocking fee was repaid to the general fund but the profits kept in a store account. This profit money would then be used for future re-stocking purchases and only when the profit balance was significantly healthy would any money be shifted into the general fund, if at all. I'd think we could simply view the store money as our advertising money and be happy if it was self-sustaining. Until profits were sufficient to make another large purchase the Board may wish to float another "loan" to the store. Or the store could simply not make another big "spec" order but rather conduct a special order event, pre-paid. But I'd really like to see the general fund kept out of this as much as possible. Too, when I speak of a special store account I don't mean yet another bank account but a bookkeeping strategy, something that would most likely be done anyhow.
perhaps the initial stocking capital could be paid back over time rather than being a first priority for the store. this would soften the startup. maybe 10% per month repay, just so as not to incur a big hit to store funding before we see if it floats...
Generally speaking, I agree with Mary.
Re: #5 Paying the general fund back right away, as soon as product sells, shouldn't pose a problem because either the store would have the profit money or an inventory. If we find a significant amount of stock simply doesn't sell then that would be a good reason to make the next order be a custom order instead of a spec order. I really don't think it's a good idea for 20% of Grex's assets to be tied up in the store for very long. If we have money to spend I'd like to see it put toward service that addresses our mission, like improved mail capabilities, speed, backup hardware, and an emergency fund that would keep us going if gradoo hit the fan. T-shirt are wonderful but not essential and I'd really hate to see us focus even 20% of our resources in that direction. Get the store started then expect it to be self-sustaining.
Ingeneral, I think that's a good idea. The only reason I see for the store being given a head start is that T-shirts have generally sold well. And it *is* a form of advertising that can bring in more members over the long haul. I think one more order of t's in a different design would be a good idea -- because people like choice. But I think we might consider doing three or four designs as custom orders for a trial period and then make a bigger order of whichever sells really well. After the second design is chosen, I agree that if the store isn't self sustaining, it's probably a mistake to try to sustain it. (I can't see that happening, though.)
What would helping to manage the store entail? I might be able to lend a hand with that...
I'm afraid I don't understand what having a separate store account would accomplish. I suppose that it would lighten the treasurer's work load, but it would increase someone else's more. Certainly I agree that the store ought to be "self-sustaining" in that it should make money. But since its only costs are the costs of stock, all it has to do to make money is sell *something*. Are you worried, Mary, that somehow money will slip under the rug here? That if we keep the money in the general fund that somehow it won't be clear how much money we have in stock, and how much we're making from the store? Because there are other ways we could make that clear. (By adding it to the treasurer's report, for instance, or having the storemaster enter a monthly report.)
Expecting the store to be self-sustaining is not a bookeeping slight-of-hand. Not at all. It would simply keep the general fund out of the business of the store and give the store some distance from whatever else is happening with Grex. Eventually. The store would make money and that money would be used to buy new stock and contribute toward other advertising efforts. Eventually, if the store does well enough, money from the store could be transfered to the general fund. The Board could decide when the balance was healthy enough to do this. Meanwhile, the store would be able to do what it needs to do without always going to the Board to ask for money to buy stock. I don't see how the treasurer's job would be any different no matter how this is set up. Either way I'd expect the users to be clearly shown, in the montly budget, where the money is going. The primary benefit I see to setting it up this way is that the store will be forced to operate within a budget supported by its sales. And the general fund wouldn't be in the t-shirt business.
Mark, were the mousepads and mugs included in the bill for $736.00?
I doubt that they were since they're from a different supplier and are "made to order".
No - we haven't paid for any mousepads and mugs. I guess I don't understand what you mean by making the store "self-sustaining". There is no way the store can lose money, because it doesn't have any overhead. The worst it can do is end up with stock that no one wants to buy. But that's a problem we have faced with T-shirts before; I don't see how separating the store's finances from the general fund will make any difference. The difference in the treasurer's job, if we had two accounts, is that there would be fewer credits to record and less communication required with the storemaster. The storemaster (if I'm understanding the proposal correctly) would be responsible for receiving money for purchases, recording the credits, depositing the money, and reporting regularly how much business the store did. That means we need a separate P.O. Box and a separate bank account for the store, with the storemaster the signator on both. Well, ok, but that seems like a lot of responsibility for the storemaster, and a lot of duplication of what the treasurer is already doing. Not to mention introducing the overhead of the cost of another box ($40/year) and another account (service charges). Am I completely lost here? Is that not what you're imagining, Mary? If the important thing is to make sure the store operates "within a budget supported by its sales", then we could accomplish that by having the board review the sales figures before allocating money for new stock. If we were Disney corporation, launching a huge gamble like EuroDisney, I would see your point about isolating the risky endeavor from the whole. But the store doesn't seem like that big a deal to me.
I think her idea is that currently the store has to go to the board and ask permission whenever they want to buy more goodies, and if the store had its own stash of funds it wouldn't need to bother, it could just go and buy the goodies it wanted without having to pester the board.
Exactly. Mark, I don't think were talking to each other at all. ;-) Somewhere, in my first response, I said this would not require separate bank accounts and that the treasurer's job would be unchanged. Even the reporting would be the same. What would be different is that the Grex Store wouldn't end up needing micro-management by the Board. They would have the profits available to use for restocks without needing Board approval. The store's cash needs wouldn't be dependent on whatever priorities were facing the general fund. If they sold stock, the money would be there. If they didn't, they wouldn't need more money. Meanwhile, the Board can look at the general fund as money available to keep Grex going and meet the demands of our mission. Every few weeks you'd exchange mail with the Storemaster and he or she would be told how much money *you* had deposited for t-shirts. You'd reimburse the Storemaster for postage on maybe a monthly or bimonthly basis. And every month *your* report would detail how much money the store brought in, how much it spend, and the store's bottom line. The money would all stay in the same account. It would be kept separate on paper. The Board will decide how much discretion the Storemaster had in terms of purchasing power but I'd hope he or she would be allowed to spend up to about $50 of what was in the Store's balance. You would write the checks to pay the store's bills. If there is a way the Storemaster could deposit checks to the Grex account without needing to be a co-signer, great. The Storemaster could do that for you. But we don't need new bank accounts or new signers. One of the reasons I'd like to see this happen, besides making it easier for the store to operate, is to not have a lot of general fund money hanging out as store inventory. Once the initial loan for startup is paid back that won't be an issue. The general fund will be available for system needs. Also, there will be a strong incentive for orders to match demand and the Board won't be having to count stock while agreeing to new orders. Under this setup I expect the store to do well and the Board won't have to micro-manage the effort. They can focus on more important issues. If the store doesn't bring in enough profit to be self-sustaining (possible if too much of the wrong thing is ordered) then that will become obvious quite quickly and the problem addressed. This really isn't all that complicated. If it sounds like it is then I'm not doing a very good job of laying it out.
Actually, it sounds like a very good idea to me, from what little I know of how grex is run.
Well, OK, that's simpler than what I thought you meant. And if, as you suggest, Mary, we call the store's balance the "promotional fund" and use it to pay for any advertisements, it solves the problem of deciding how much money to allocate for advertising, which is something we also needed to address. I'm not sure that's a *good* solution, but I don't have a clue, otherwise, how to decide how much to spend on advertising. So it's a welcome idea. So you're imagining that if the promptional fund contains $700, and the storemaster wants to order $700 worth of shirts, he need only ask the treasurer for a check, and the board doesn't have to approve the expense at all? But if the storemaster wants to "borrow" money from the general fund, then he needs to ask the board for approval? I guess I have no objection to adding another category to the treasurer's report, to subtract from it all purchases of stock and advertisements we buy, and to add to it all sales from the store. Right now the total will be significantly negative, since we have paid out more than we have taken in. Perhaps the treasurer's report ought to include a summary of all store stock as well?
You got it. ;-) If the monthly treasurer's report documents the store's income and expenses, broken down into stock purchased and sold, mailing supplies, postage, and a clear balance, then I don't see why a monthly inventory would be needed. When the Board wants to allocate funds for a promotional activity they'd confer with the Storemaster to see if such expenditures could comfortably come from the Store "account". I expect the answer would pretty much be clearly visible in the numbers but in the event there were questions, again, an inventory could be requested. When (if) the profits ever got so big that the Store and promotional activities were being adequately funded the Board could then decide to move some money over into the general fund or put it toward a special project. But meanwhile the Store chugs along without a lot of micro-management. I expect it will be some time before the Store will be operating in the black, with the startup costs repaid to the general fund. I'd also suspect the next order or two will be a custom order for just what is needed to increase profits and fine-tune the inventory. And ya'll will be very happy to hear I'm going back to work tomorrow and won't have nearly as much time to ramble on and on and on... ;-)
Mark: When Rob dropped of the Mugs and mouse-pads, he said he thought he had
been reimbursed for this. This would have been quite a long time ago. Way
back when Rob originally got them made. I know I bought a mousepad and
Valerie bought a mug back then. I thought we paid Grex, so I hope Grex paid
Rob.
Hmmm... I think I'd handle this by making a rule:
_____
\
> (purchase price of item) < $900
/____
inventory
That is, we should never have more than some amount, say $900, invested in
inventory.
This rule means the storemaster does not have to ask the board for approval
every time a purchase is made. If the storemaster wanted the cap raised,
then board approval would be needed.
The cap should be relatively high, so that purchases can be made in large
lots (thus keeping costs down). We would expect the actual inventories to
average significantly lower than the cap.
For internal accounting, I'd probably ask the store keeper to report on
the total purchase value of Grex's inventory at the end of each month. On
Grex's account books, we'd record that value, the purchase price of the
inventory, as part of Grex's total worth. This way we won't see Grex's
finances take an apparant nose dive every time we buy a batch of T-shirts.
Instead, purchasing inventory will just show numbers moving from the cash
column to the inventory column. We will see Grex's bank account rise
whenever the shop sells anything, since the sales price is higher than
the inventory price.
This is a bit of a pain. Different shirt styles and colors have different
purchase prices. I don't know what they are, though I guess I can get them.
But I don't see any sensible way of avoiding that without making complete
nonsense out of our account books. I think it's pretty much a matter of
setting up a spreadsheet, recording purchase and sales price of each type
of item, and carefully updating the inventory counts of each item. Not
really too bad.
I don't like the idea of farming all the profits from the store back into
the store. I don't see why the store should necessarily grow significantly.
If there are reasons why it should get bigger, then the board should be asked
to grow its inventory cap.
Here's what I see involved in the shopkeeper/shopmaster job:
Keep the inventory in some reasonably safe place.
Accept orders and arrange for delivery of the items.
If people pay you instead of Mark, transfer money to Mark.
Keep records of current inventory, purchase prices, sales prices.
Report monthly on the state of things.
When inventories get low, coordinate new purchases.
Related work that may or may not be done by the same person:
Maintain grex shop web page.
Design new stuff.
Basically it's a job that requires a someone who is well organized, and has
pretty good personal skills for dealing with other volunteers, suppliers and
customers. Its probably moderately good resume fodder ("I managed the
merchandising branch of Cyberspace Communication Incorporated for two years
and brought in a 340% return on investment").
It could be divided over several people. So far, Rob has been doing most of
the design and purchasing of stuff (it makes a lot of sense for people doing
design to coordinate directly with the suppliers), while I've been doing
the sales (such as they are).
I would add that the storemaster ought to keep track of requests ("backorders")
that get made but can;'t be fulfilled because the item requested is out of
stock. That, and records of what has sold well in the past, will provide a
sound basis for deciding what to stock up on next time a purchase is made.
If bruin is still interested in the job after reading Jan's definitions, I
think he'd do it well.
The position looks somewhat less attractive to me right now, but I could probably still volunteer as long as I am not doing all the work by myself.
If you are going to let the store manager place orders by simply requesting the money from the general fund then I think you need a few other safeguards other than a $900 max of stock and money available. If the general fund is flush with $6000 of cash assets then $900 is reasonable. If the fund has just had a big hit for hardware or donations are down and maybe we only have $2000 available then $900 is way to high. Maybe a dollar figure or a percentage of cash assets, whichever is the *lower* figure. I still would very much like to see store business kept quite out of the general fund. But that's just me. Too, whatever system ends up being used the treasurer's report will clearly show, on a monthly basis, how much money went to the store and what the bottom line cash assets are, right? I'd hate see folks following an "assets" line, thinking that cash is available to keep grex running in the event of an emergency only to find out it's being held in t-shirts.
Id like to pointout that grex going into the retail business doesnt exactly fit into its non-profit status. It could be argued that grex itself is one venture (non profit) and the store is a separate retail venture (for profit) I wonder if this is being done on too large a scale.
The local PBS tv station has a "Store of Knowledge" shop in the local mall...I'd really be surprised if our operation was "too big". It's fundraising, so all the profits really go to Grex, instead of shareholders.
I guess I'd like to solicit some other ideas about how much money we should spend on advertising. I'll go enter an item about it.
OK, I've entered item 57 about advertising strategy.
re 25:
Even non-profits need money to operate, Richard. The difference
between a for-profit and a non-profit is where the money goes. In a
for-profit corporation, profits go to the owners (well, in theory anyway.
I imagine most for-profits consist of the owners putting lots of money in and
not ending up getting very much back out). In a non-profit, the money has
to go to further the organization or its goals, rather than enriching the
people who control it.
Re #20: I can't find any record that we paid Rob for the mousepads and mugs, I'm afraid. :(
#29 sounds like what Arbornet thought, when it was selling manuals and the like. My wife (aandrea) used to be the business manager for NEW Center, and has some insight into financial matters for non-profits. She told me about a time when NEW Center was selling manuals, and assuming it was covered as part of their mission. It wasn't, it was "unrelated business income", and they had to pay sales and income taxes on it, as I understand what she said. Someone responsible might want to ask her about that, or contact NEW Center and see if they can help answer the question, or as Aaron Larson. My understanding is that the TV56 store in Briarwood is also producing "unrelated business income", and that the money probably has to be accounted for in a different way than donations and advertising money. My understanding is very weak in these matters. If Grex is trying to operate according to the rules of a 501(c)(3), though, the Grex Store is probably not covered under it's mission.
#29..exactly, I dont think it is covered....itis one thing to operate via user donations, but operating via retailsales is another thing, even if the money is going to the same place. Wouldnt want grex to end up owing $$$ to the IRS because the rules wre misunderstood. Im just saying maybe this wasnt thought through enough before the go ahead was given to do it on this scale.
I'm hoping Rane jumps in here as his information is more up to date than mine but I believe organizations like Grex are allowed to receive money, even when folks are getting a product in return, so long as that profit isn't more than 1/3 of the organization's gross income. I think our supplying and even selling t-shirts and related logo-merchandise is a neat idea. I'd like to see some safeguards set up so that it can't get away from us yet be easy to manage, but I really like the idea. Rob and Jan have done a Good Thing in getting this going. Mark is working to see it gets accurately integrated into the budget report. And I sure hope that people throwing in suggestions from the sidelines (myself especially) isn't being taken as as sign their efforts aren't appreciated.
The Grex Store definately is "unrelated business income". I'd have to dig up the rules on that again, but my memory was that we were in no immediate danger of violating any of them.
You have to meet the IRS "support" tests. Mary alludes to the 1/3 rule, but one has to know what to put in the numerator and what in the denominator. The test, under 501(c)3, is in regard to "public support". All income goes in the denominator, and essentially all donations go into the numerator (but you can't count donations from single sources that are more than 2% of the gross income). Dues count as public support. I haven't been following this very closely, but have STATE SALES TAXES been mentioned? You have to have a license to sell retail, and you must collect sales taxes and submit them to the state. I am not immediately conversant on the rules for also paying federal income taxes on sales - never had to deal with that.
what if we call it "the Grex eternal fundraiser" and offer the items as "premiums" (or "premia") for the "donations" we receive?
There are rules on the value of premiums used in fund raisers before the recipients have to deduct that value from the tax deduction they can claim (this is for a 501(c)3). I don't think that such premiums are subject to state sales tax, since you are not offering them for sale. This would have to looked into further, though. By the way - it is easy to get a state sales license. But then you have to submit regular reports (and a form), even if you have no sales. If you lapse, they let a big penalty build up, and then dump that on you. So filing the sales tax report would become a regular necessary job of the treasurer. It is not hard, but it cannot be forgotten. There is certainly no *harm* in collecting and remitting sales tax. You can build it into the price of the goods, even, and then figure out later what you must send to the state.
Yes, we have a sales tax license, as of about 3 weeks ago, and yes we have been collecting sales tax on items sold in the Grex store. Valerie, you will give me the forms to submit and let me know how often to submit them, right?
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I don't want to see the store hung up on bureaucratic trivia. I
hope that the Board lets aruba set up the *simplest possible*
accounting system.
Since Grex is currently *not* a 501(c)(3) organization, but
a simple Michigan non-profit, all that stuff about "unrelated income"
and the 1/3 rule don't apply. But, just FWIW, nothing is "unrelated
income" (and hence taxable) which is produced by volunteers *alone*.
This is what I call the "bake sale rule." Many if not most 501(c)(3)'s
have volunteer fund-raising projects which have nothing to do with
their mission. The IRS doesn't tax these projects.
With regard to Michigan sales tax, Dave Thaler told me that
goods sold by a Michigan non-profit (like Grex) are *not* subject to
sales tax unless more than $15,000 of goods are sold per year.
Maybe valerie will find such a provision in the sales tax paperwork
she is reading. If not, a call to Lansing might be *very* helpful.
No level of government is interested in going after small-
scale nonprofits.
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#41...yes the 501(3)(c) rules dont apply because grexdoesnt have that status, but grex's bylaws do state dont they that grex has to abide by those rules anyway. this came up in agora when I was asking about grex endorsing political candidates and the answer I got was that grex couldnt because it was bound by the bylaws to follow what would be the rules if it were a 501(3)(c) even though it is not. It would be hypocritical to say that in one case grex has to follow 501(3)(c) rules (and therefore not endorse Larry Kestenbaum if he runs for state rep) but in the other case of the grex store and the 1/3 requirement it doesnt have to follow the rules.
Richard, I've just read the Grex bylaws (See Coop Item 2) and I can't see anything in them about 501(c)(3) status at all. I think there may be a bit of misinformation floating around for the reason that taxes are considered hard, scary, and boring at the same time, so very few people have any idea what the story is.
According to Jan in resp:coop,13,1 the proviso in question is in our Articles of Incorporation, article 6, section 3. I don't know where to find the Articles online, though.
The Articles of Incorporation are in Coop Item 3. And yes, that's where the proviso is.
When Grex does file for 501(c)3 status it will have to submit its fiscal records for past years, to ensure that it has conformed in the past to 501(c)3 regulations and does not owe past taxes, etc. It is not adviseable to do anything now not in accord with 501(c)3 exemption if such exemption will be sought. Of course, if past practices were not in accord with 501(c)3, but past taxes are still not due, then there should be no problem (but maybe some delays).
Exactly. That is why I don't like to follow arguments that are predicated on the assumption that we are not a 501(C)(3). We want to become one, so if we take advantage of the fact that we are not one, we will only make it harder later on.
I sure wouldn't want to see Grex endorsing political candidates. What would such an endorsement mean? That the Board had decided to endorse someone, and therefore if I want to become a member and vote, I have to consider the politics of the candidates? That all of us endorse the candidate? How is that determined? There are users here who are from countries that don't get to vote. Do they endorse who "we" endorse? resp:43 really set the bells to clanging for me. Sorry about the drift.
BTW we received a packet from Lansing in the mail today, containing coupons and instructions for paying them the sales tax we have collected.
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I wasnt saying Grex should endorse political candidates outright,but just that what would be wrong with giving a little publicity to Larry's campaign...such as creating a conf for him that could be his virtual campaign headquarters and reminding people about it in the motd from time to time. Does that constitute an endorsement? I dont think so but some think it does and that it would be a 501(3)(c) violation. I dont think there is anything wrong with public advocacy groups using grex. And dont think grex endorses a particular group or view simply by virtue of sharing use of its facilities.
There are a whole lot of reasons that Grex shouldn't be endorsing candidates even to the extent of "giving a little publicity to" certain favored candidates. How do we choose which candidates get favored? How much bigger does the motd have to get, & who gets to choose which candidates are endorsed there? Aside from any tax-status issues, it would quickly become a major distraction from Grex's mission - conferencing - if in fact it got anywhere at all. Do we start having people run for the board so that they can make Grex endorse their chosen people? How much discussion do we have to have in coop about the pros & cons of particular candidates? Bleah. What jep said, to about the hundredth power. OTOH, if polygon *wanted* to start a conference here to serve as his "virtual campaign headquarters", he need only ask that the conference be created. Of course, the same is true of any candidate at all, so this would constitute no endorsement whatsoever. As far as I know, our policy has *always* been to allow any user to propose a that a conference be created, & to do it (after a reasonably brief discussion period) unless the person making the proposal changed his mind. As usual, Richard, your head is screwed on 180 degrees backward on this.
Well, maybe 90 degrees?
richard .... 501(c)3 DOES NOT APPLY TO GREX !! quit typing it, 'k?
It does, according to the Articles of Incorporation (but without the benefits, only the responsibilities, because application has not been made).
No corporation can impose tax-related duties on itself, for pity's sake! The languate in the articles can only take effect upon the obtaining of 501(c)(3) status from the Feds.
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But it becomes much, much easier to *get* 501c3 status if we've already been following the rules. The IRS is very willling to turn people down, you know.
resp:57 Why now? I can't think of any reason why one couldn't.
Re #57, in agreement with #60: of course it can. It can impose policies (in fact, it has) requiring that it not do anything that would jeopardize obtaining 501(c)3 exemption, which is what the Articles provide.
Was the topic of the role (and authority) of the Grex Store Manager ever brought before the Board? I don't see any mention of it in the minutes. I believe Jan announced jiffer has the job. But I'd assume all purchases will need to be authorized by a Board vote? That may acually be the best way to go unless the store is going to be doing a whole lot of business and bringing in significant profits.
I don't think the Grex shopkeeper can purchase anything without board authorizations right now. It is possible that we should consider the job as one that should be approved by board vote (though jiffer volunteered during a board meeting and no objections were heard). Formalizing it a bit more is probably a good idea. I guess the shopkeeper is managing a non-trivial portion of Grex's assets (the store inventory) and needs to be appointed by someone, and if not by the board, then who? So yeah, I think we should elect jiffer to the job.
Anyone manipulating Grex assets or acting publically on behalf of Grex should be appointed by the board. It helps protect them and assures others with whom that person deals.
the grex shopkeeper should be the grex treasurer, because the treasurer can make purchases without board authorization
Except for one problem, Richard. Both shopkeeper and trearurer are big jobs and since Grex can't afford to pay a salary, we have to make sure our vulunteers also get a couple of free hours a week to make a living in. Other than that it makes sense.
Even the treasurer cannot make purchases without board authorization. The board adopts a budget, or a specific purchase authorization, and identifies who will make the purchase - it is not usually the treasurer, who just pays the bill when it arrives.
yes, but anybody who has their signature in grex's signature file at the bank can write a check, and pay for stuff, and get it authorized after the fact by the board. So I guess the shopkeeper needs to be one of those people. How many people can sign grex checks? Must be three or four people right?
Our check signers are supposed to get board approval first, Richard.
I'm the only one who has any checks. :) I certainly wouldn't make a purchase of anything non-standard without getting the board's approval.
Absolutely no one except the treasurer plus an alternate in the event of his/her absence, should be able to sign checks for an organization. Having more than one authorized person signing checks regularly is an invitation for confusion if not serious problems. In the organizations in which I am active this is always the case. However the treasurer can advance funds to someone to have on hand to make a purchase, or write a check for that person to use at the time of purchase, or require an invoice and pay directly to the vendor. The last is the best, but only for things for which the vendor will accept payment on an invoice.
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In a large enough organization it is certainly possible to have lots of people who can write checks. I'm quite certain ford motor company doesn't have one person plus an alternate who signs all the checks the company issues. If nothing else, think of the disability payments when their wrist ligaments fail, plus the number of upset union people there would be when paychecks didn't show up because the guys signing the checks can't sign them fast enough to keep up with the montly payroll. Fortunately, grex isn't anywhere near this size.
companies of that size, and typically, smaller ones as well, contract payroll management companies to process and distribute those checks so that the treasurer can handle other matters of a less regular or more "important" nature...
They also write checks with a computer and printer...and they authorize a number of departments to "write checks" on the authorized budgeted accounts. When I order something from a UM account over which I have authority, a computer somewhere writes the check and debits that account. If Grex wants to budget by accounts, that's fine....but the checks would still be "written" by the Accounting Office computer. The real point is to not have conflicting authority over a single account. At the moment, Grex just has one account.
Many companies, in fact, *especially* often small companies, contract out their payroll operations. But the reason there is not so much scaling issues (although that's certainly a factor too) but because it's complicated, high risk, and uniform across companies - so it's possible for companies, such as ADP right here in town, to offer payroll services for cheaper than most companies could do it for themselves. Rane and I may be unusual in that the organization we work for *doesn't* contract this out to ADP. This is all, of course, entirely moot for grex, because grex doesn't have any salaries, its labour force is even cheaper than hiring outside contractors, the total amount of money grex has is too small to be worth anyone else's while, and because it would take more effort to supervise an outside contractor to handle our money than it would take us to do it ourselves. Computers certainly do facilitate accounting. But this is has very little to do with how the accounting is structured, and is *certainly* not a substitute for good accounting practices. I'm sure our treasurer would not be happy were we to require he dispense with the services of a computer in handling our accounting needs, even though he is just one person. Conversely, in the 19th century, railroads handled financial and accounting needs far more complicated than grex is ever likely to become, using no technology more advanced than that of the typewriter, telegraph, and carbon paper--and a lot of hand powered ink dripping pens. Having said all that, I do in fact agree it's reasonable to have the usual treasurer who handles most of the accounting needs, plus an emergency alternate in case the treasurer falls off a ladder or something. I also agree that it's reasonable to have that treasurer write out the checks that pay for merchandise. But the correct reason is not "because it's the only way to do it", or "because of computers" - it's because it's the simplest, best way, to do it, given the present size & structure of grex. Now, if our merchandizing efforts really expand, and we start competing with mickey-mouse for space in department stores, or we start selling merchandize in india, *then* it might be time to rethink this strategy, and there *are* other solutions that would be more appropriate.
Somewhat before that point, I think.
As the some what new shopkeeper, I would not feel right having to make purchases without first the boards approval... which I feel is the only right way of doing things.
You have several choices: