In this scenario, your club collects monies from its members to pay for event entry tickets / hotels, etc. on their behalf. For example: members pay £5 each for cinema tickets which you receive into a club account and then pay directly to the cinema to bulk purchase the tickets.
In this case, the receipt and payment should reflect on your balance sheet as cash in the bank and a corresponding creditor/liability balance as this is not the club's money. Also, this should not impact your P&L as it is not trading income or expense.
So how to account for this?
Actually, this is very simple using the Account Transfers feature (Transfers > Account Transfers).
1. When you receive member fund(s) create a new Account Transfer(s):
- From: Creditor A/c
- To: Bank A/c
This will record the cash into your bank a/c and create a liability balance on your balance sheet.
2. Similarly, when you purchase items on-behalf of your members create an opposite Account Transfer:
- From: Bank A/c
- To: Creditor A/c
This will reduce the bank and liability balances. Note that it is not necessary to record the purchase details as these do not relate to your club accounts, but you may want to record these in the Transfer Details or Notes as a memorandum.
Finally, you can use the Account & Cashbook Report to monitor and report your transactions against the Creditor A/c.