Understanding How Memberships Are Recorded in Accounting

In Springly, all modules are connected to one another. This means that when you record a membership under Community > Memberships, a bookkeeping entry is automatically created. This article walks you through the accounting impact of a membership: the membership entry, payment entries, and the accounting records involved.

In this example, we're recording Perrine's membership for $50, with a first payment of $20 in cash and a second payment of $30 by check.

When a membership is recorded, one or more book entries are generated:

• The first is tied to the membership itself.
• The subsequent ones are tied to each payment.

The first entry is linked to the membership: it credits account 756 (memberships). In this example, account 756 is credited $50.

The debited account then depends on whether the membership is linked to a person:

• Membership linked to a person: account 467 (user account) is debited.
• Membership with no person linked: account 411 (account receivable) is debited.

In this example, the membership is linked to a person, so account 467 is debited.

Here's what this line looks like in the Journal.

Until the membership is fully paid, it appears in the accounts receivable list.

Each time a payment is recorded, a new entry is created. The credited account is the user account (account 467), credited for the amount paid. In this example, account 467 is credited $20.

The account debited depends on the payment method used:

• Cash payment: account 531 (petty cash)
• Bank payment (credit card, wire transfer, direct debit…): account 512 (bank)
• Check payment: account 511200 (checks pending deposit)
• Online payment: account 517 (e-wallet)

In this example, account 531 is debited $20.

Here's what the payment line looks like in the Journal.

I then record the second and final payment. The credited account remains the user account (account 467), credited for the amount paid. In this example, account 467 is credited $30.

Since the payment hasn't been made in full, the membership still appears in accounts receivable, but the amount already paid is shown.

The debited account again depends on the payment method used. In this example, Perrine paid by check, so account 511200 is debited $30.

Next, we record the second and final payment. The intermediary account is again credited for the amount paid. In this example, account 467 is credited $30.

The account debited again depends on the payment method. In this example, Perrine paid by check, so account 511200 is debited $30.

Here is what the membership and its two payments look like in the Journal. Since the membership has been paid in full, it no longer appears in accounts receivable.

Here's what the membership and both payments look like in the Journal. Since the membership has been paid in full, it no longer appears in accounts receivable.

You can find all your memberships under account 756 in other accounting records:

You can find all your memberships under account 756 in other accounting reports:

The General Ledger:

The Profit and Loss:

And the Statement of Financial Position: