Journal entry for pass throughs.

TimCA · ‎August 06, 2024

Hi,

We are a small non profit labor organization. 501c5. We collect dues from our members monthly. There dues include both operational dues and "pass throughs". The "pass throughs" are set by the parent organizations and we pay them on the members behalf monthly. Example the member pays $30 per month, of that $20 goes to the operations of the 501c5. Then $5 to each of the other organizations, both 501c5's, All my members who we collect from are members of the other two organizations.

Should I journal this as $30 "Dues" income and $20 /$5/$5 expenses? I somehow what the $5 and $5 to be reflected somewhere as restricted as it just passes through and are unavailable for operations day to day.

Thanks for any input and guidance.

Tim

btks · ‎August 07, 2024

Create two current liability accounts, one for each of the pass through organizations. When receiving dues, post $20 to an income account and $5 to each of the current liability accounts. This will track how much you owe each of the parent organizations and keep those amounts out of your income.

When you pay the dues to the parent organizations, use the liability accounts as the pay from. These are not expenses for your group.

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Journal entry for pass throughs.

Journal entry for pass throughs.

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