Just want to clarify further, when you mention fees being taken into account in the year to which they relate, are you intending to have the fee payments realised in the year they are paying for, rather than the year of the advance payment? E.g. paying for 2020's fees in 2019, but recorded as under 2020's reports?
Yes, we would prefer that the fees are taken to account in the year to which they relate rather than the year in which they are paid, so you are correct in the example of 2019/2020 fees.
We have only just introduced this plan which allows members to pay 5 or 10 years fees at a discounted rate which will greatly inflate the Membership Fee item in the year the payment is made unless we can account for this in some way. We are a NFP and operate our accounts on a cash basis with no GST implications.
I was thinking of maybe a suspense account for future years payments, adjusted on an annual basis by accounting for the current years fees paid in advance but I'm not sure whether that is the best way to go.
Actually, what might be easier is to simply create your future invoices and match the lump sum payment to each of the open invoices. This will allow you to receive your payment today, but be reported upon in the year of the membership per the invoice.
For example, if you have sold your membership for the next 5 years at a discounted rate, create the invoices for the next 5 years; 2020, 2021, 2022, etc. Once you've don't that you are then able to match the payment in the bank feed to the open invoices.
Would this option work for you?
Thanks for your suggestion Christine,
We don't issue invoices for fees; it's all pay up front for everything, so will keep your suggestion as an option when I make a final decision on which way to go.