Financial Types

The “Financial Types” feature in the Finance module of Retention CRM acts as a filing system for your payments. Imagine folders for different types of payments – donations, event fees, memberships. You can create as many as you need, allowing Associations, Chambers, and Nonprofits to categorize their incoming funds clearly. This is crucial for reporting (understanding fundraising trends) and accounting (ensuring accurate financial records). Financial Types can even manage the cost and stock of any “thank you” gifts nonprofits offer their donors.

These categories link to specific financial accounts, which track where your money flows. This way, you can see how much income comes from membership fees, event fees, etc., and ensure proper allocation of funds. For example, a donation earmarked for scholarships can be placed in a dedicated “Scholarship Fund” account.

How to Use “Financial Types” Feature in Association Management

Let’s use the provided fields and settings to understand how a Nursing Association can benefit from Financial Types feature in Retention CRM.

• Name: This is the label for your category. For the Nursing Association, examples might be “General Donation,” “Scholarship Fund Donation,” or “Conference Registration Fee.”
• Description: Briefly explain the purpose of the category. For “Scholarship Fund Donation,” you could write “Supports scholarships for student nurses.”
• Financial Accounts: Choose the accounts linked to this category. For “General Donation,” this might be “Donations – General” for income and “Accounts Receivable” for any outstanding pledges.
• Deductible? Mark “Yes” if donations in this category are tax-deductible for the donor. For the Nursing Association, most donations would likely be tax-deductible, so you might mark “Yes” for “General Donation” and “Scholarship Fund Donation.”
• Reserved? Use this for future pledges or commitments, not immediate income. This would likely not be used by the Nursing Association for donations.
• Enabled? Choose “Yes” if you want to accept payments through this category. You might disable “Conference Registration Fee” after your event closes.

By customizing Financial Types, the Nursing Association gains valuable insights into their finances and can effectively manage their resources for their mission.

More Use Cases for Chambers of Commerce, Associations and Nonprofits

Tailored Donation Categories for Improved Resource Allocation (Nonprofit Organization)

Examples

• Financial Type Name: “Cat Care Donations”
  • Description: “Supports the care and well-being of shelter cats, including food, medical care, and litter.”
  • Financial Accounts: “Donations – Cat Care” (Income), “Pet Supplies Expense” (Expense)
  • Deductible: Yes
  • Enabled: Yes
• Financial Type Name: “Dog Training Program Donations”
  • Description: “Funds specialized training programs for shelter dogs to enhance their adoptability.”
  • Financial Accounts: “Donations – Dog Training” (Income), “Trainer Fees” (Expense)
  • Deductible: Yes
  • Enabled: Yes
• Financial Type Name: “Building Fund Donation”
  • Description: “Contributes to the expansion or renovation of the animal shelter facilities.”
  • Financial Accounts: “Donations – Building Fund” (Income), “Construction Costs” (Expense)
  • Deductible: Yes
  • Enabled: Yes

By creating specific financial types for different animal care needs, the shelter can track donations effectively and allocate resources efficiently. This transparency can also be helpful for attracting donors who care about specific causes.

Membership Tiers with Targeted Benefits and Financial Tracking (Association)

Examples

• Financial Type Name: “Basic Membership”
  • Description: “Provides basic benefits like newsletter access and discounted event tickets.”
  • Financial Accounts: “Membership Fees – Basic” (Income)
  • Deductible: Potentially a small portion (check with tax advisor)
  • Enabled: Yes
• Financial Type Name: “Sustaining Member”
  • Description: “Offers all basic benefits, plus exclusive member events and voting rights.”
  • Financial Accounts: “Membership Fees – Sustaining” (Income)
  • Deductible: Potentially a small portion (check with tax advisor)
  • Enabled: Yes
• Financial Type Name: “Patron Membership”
  • Description: “Includes all benefits of Sustaining Members, plus special recognition and invitations to patron-only events.”
  • Financial Accounts: “Membership Fees – Patron” (Income)
  • Deductible: Potentially a small portion (check with tax advisor)
  • Enabled: Yes

By setting up financial types for different membership tiers, the historical society can easily track membership income and tailor benefits accordingly. This can incentivize higher membership levels, providing a sustainable funding stream for the organization.

Event Fee Management with Differentiated Pricing for Members and Non-Members (Chamber of Commerce)

Examples

• Financial Type Name: “Business Expo Booth Fee (Member)”
  • Description: “Fee for Chamber members to showcase their products or services at the expo.”
  • Financial Accounts: “Event Fees – Expo (Member)” (Income), “Expo Booth Rentals” (Expense)
  • Deductible: No
  • Enabled: Yes
• Financial Type Name: “Business Expo Booth Fee (Non-Member)”
  • Description: “Fee for non-Chamber businesses to participate in the expo.”
  • Financial Accounts: “Event Fees – Expo (Non-Member)” (Income), “Expo Booth Rentals” (Expense)
  • Deductible: No
  • Enabled: Yes
• Financial Type Name: “Annual Chamber Luncheon (Member)”
  • Description: “Ticket fee for Chamber members to attend the annual luncheon.”
  • Financial Accounts: “Event Fees – Luncheon (Member)” (Income), “Catering Costs” (Expense)
  • Deductible: No
  • Enabled: Yes

With separate financial types for member and non-member event fees, the Chamber can encourage membership by offering discounted rates. This can be a valuable benefit for businesses and a reliable source of income for the Chamber.