YPO-WPO Chapter Finance Training

1. YPO-WPO Chapter Finance Training 2008

2. Contents • Chapter Finance Best Practices • QuickBooks Enterprise Solutions • Chapter Investment Program • Chapter Dues Collection Program • Global Chapter Insurance Program • Tax Issues

3. Chapter Finance Best Practices • Incorporate the Chapter • Single most important factor in managing risk to the chapter officer is to incorporate the chapter • Build Cash Reserves to 50% of Operating Expenses • Set a goal and timeline for achieving the desired cash reserve target • Agree on calculation of the reserve (YPO-WPO is calculated as: Total Assets – Total Liabilities – Net Fixed Assets • Establish an Investment Policy for the Chapter • Use the YPO-WPO policy as a reference to define a policy for the chapter

4. Chapter Finance Best Practices • Develop an Annual Budget and Measure Results • Measure results against budget to improve transparency and accountability • Develop a model in Excel that uses historical actual information to help create a budget. Apply formulas that are driven by assumptions to allow “what if” scenarios to be generated. The same model can also be used to create a forecast as the year progresses. • Transparent Financial Reporting • Chapter Financial Reporting should be available for all chapter members to review

5. Chapter Finance Best Practices • Use QuickBooks Enterprise Solutions • Most important factors to consider when choosing how to maintain financial information for the chapter is: • Data Automatically Backed Up in a Secure Environment • Multiple User Access with Security by Role • Ease of Adding New Users as Officers Change each Year • YPO-WPO QuickBooks Enterprise Solutions meets these criteria and is accessible through a web interface • QuickBooks Enterprise Solutions available at no cost to the chapter • For information email chapterservices@ypo.org.

6. Chapter Finance Best Practices • Timely & Accurate Tax Filings • Timely & accurate tax filings with the proper tax authorities are critical for maintaining tax exempt status • Chapter Officer with responsibility for tax filings must be clear • Document Controls and Procedures for Cash Receipts and Disbursements • Document controls and review each year as new officers assume their responsibilities • Reconcile all Bank Accounts Monthly • Reconciliations should be prepared by someone who does not have signature authority on the account. • Require All Chapter Funds to be in a YPO-WPO Bank Account • Do not allow funds collected from dues or for an event to be kept in a member or member’s company bank account

7. Chapter Finance Best Practices • Other Suggested Controls • Have annual budget approved by Chapter Board • Have Board approve expenses that exceed budget by 10% or a predefined amount • Review financial performance vs. budget at Board meetings • Require two signatures for expenses in excess of a pre-determined amount • Expenses should never be approved (nor should checks be signed) by the payee • Implement a travel expense policy and only reimburse expenses supported by receipts • Use a Certified Public Accountant/Chartered Accountant to assist with preparing financial statements, tax filings and establishing a chart of accounts

8. Chapter Finance Best Practices • Follow Contract Best Practices for Events • MyYPO Finance Webpage includes information on best practices and sample clauses for event contracts https://www.myypo.org/MyYPO/Assets/Files/YPO_Intl/Event Contract Best Practices_v2.pdf • Additional online resource for hotel contracts: http://www.exhibitoronline.com/exhibitormagazine/article.asp?ID=583 • Work hard to negotiate clauses favorable to YPO-WPO • Room blocks and cancellation charges often are the most critical part of the contract since the event may have to be cancelled if signups are too low • Be clear on who has authority to sign contracts on behalf of the chapter • No deposits or payments should be made until the contract is signed by both parties

9. QuickBooks Enterprise Solutions • QuickBooks Enterprise Solutions (QBES) looks and works just like QuickBooks Desktop • Multi-user system with role based security • Software runs on YPO-WPO servers and is kept current and backed up by YPO-WPO • Accessible through the web with same speed as desktop application • YPO-WPO training is available • Hundreds of third party training options available • No cost to chapter • For information email chapterservices@ypo.org

10. Chapter Investment Program • Leverage the investing power of YPO-WPO for your Chapter • Higher returns, no principal risk, no minimum investment and no cost to the chapter • Current yield is 3.6% (February 2008) • Current fund is WFIXX and details can be reviewed online at www.smartmoney.com (fund is subject to change) • Monthly easy-to-read statements • Access to funds is typically 24 hours • Authorized signer(s) on the account will be established for the Chapter • For information email chapterservices@ypo.org

11. Chapter Dues Renewal Collection by YPO-WPO • Chapter members can renew and pay chapter dues online • Members receive one electronic invoice for both YPO-WPO International and Chapter dues • Collection follows the YPO-WPO renewal cycle which begins in April • Only cost is a 2.5% credit card fee that YPO-WPO incurs on credit card processing • A reconciliation of funds received is sent to the chapter monthly • Members can pay by credit card, check or wire transfer • Currently limited to US dollar transactions only • Chapter must be incorporated • Annual agreement must be signed for the service • For information email chapterservices@ypo.org

12. Austin Chicago Columbus Czechoslovak Empire State Lewis & Clark London-Westminster Manhattan Maumee Valley Miami New England New York City North Texas Oklahoma City Rocky Mountain San Francisco Bay U.S. Capital Chapters Using YPO-WPO Dues Collection

13. Global Chapter Insurance Program • What’s Included? • Business Personal Property & Computer Equipment • General Liability for Chapter Functions • Hired & Non-Owned Auto Liability • Umbrella • Non-Owned Aviation Liability (for member owned aircraft used at YPO-WPO functions) • Association Liability • Director’s & Officers Liability • Kidnap & Ransom

14. Global Chapter Insurance Program • What’s Not Included? • Worker’s Compensation • Employee Dishonesty • Certificates of Insurance provided by YPO-WPO Insurance Broker: Roach, Howard, Smith & Hunter (just complete and fax form found at: https://www.myypo.org/ypotoolkit/pages/chapter_ops/files/request-cert-insurance.pdf ) • Limits/Deductibles/Additional Details available at: https://www.myypo.org/ypotoolkit/pages/chapter_ops/files/Global_Insurance_Program.pdf • Need assistance making an insurance decision? Call Denise Bump at 1.972.744.2725 or email to dbump@rhshins.com

15. Tax Issues • Are My Dues/Event Fees Tax Deductible? • For US chapters who must follow Internal Revenue Service regulations, the answer depends on whether the expense can be substantiated as a necessary and ordinary business expense. This is a subjective issue for all taxpayers and only the individual or member’s company can determine the answer. YPO-WPO recommends that the member contact a Certified Public Accountant to assist with the question. • Non-US chapters often face a similar issue although each country has its own tax law that must be followed. Our advice once again is to contact a Certified Public Accountant/Chartered Accountant familiar with the tax laws of the chapter’s country.

16. Tax Issues • What exactly does tax exempt mean? • YPO-WPO is a 501(c)6 organization which means that the organization is exempt from Federal income tax. Chapters in the US are automatically covered under YPO-WPO’s group exemption approved by the IRS. The group exemption number for YPO-WPO is 7096 and must be included on the annual return. • An exemption for state income tax will have to be obtained by the chapter. YPO-WPO recommends seeking the help of a local CPA firm in filing for state income tax exemption. • Does the chapter have to pay sales tax/VAT/GST? • In most cases, 501(c)6 organizations are not exempt from sales tax in the US. • Chapters outside the US should contact their Certified Public Accountant / Chartered Accountant.

17. Tax Issues • Does the chapter have to file a tax return? • An annual tax return (Form 990) must be filed by the 15th of the 5th month after the chapter’s year end. If the chapter year end is on June 30 then form 990 must be filed by November 15th. • A state tax return may have to be filed (depends on the state in which the chapter is located) • For non-US chapters, check with local tax authorities to determine the filing requirements • Failure to file a return is a serious problem that will result in fines and potential loss of tax exempt status

18. Question About YPO-WPO Finance? Log onto the Finance Dashboard on MyYPO: https://www.myypo.org/myypo/ypo_intl/finance.aspx