Farmers Market Bookkeeping
Best Practices
Washington State Farmers Market Association – February 5, 2016
Farmers Market Bookkeeping Best Practices
Sheri Muntean CPA PhD
•
A Certified Public Accountant since 1991, worked with Price Waterhouse and
Ernst & Young (EY), specializing in small business audits and taxation, retiring as
the EY National Tax Compliance Knowledge Manager for EY in 2000
•
In private practice since 2000, continuing to specialize in small business and not-
for-profit accounting, taxation and consulting
•
Working with the Anacortes Farmers Market for over 10 years, as well as the
Skagit Valley Farmers Market Coalition, closely supporting the farmers markets
and farmers within them with accounting, consulting, and tax services
•
Since 2011, Sheri started working with markets statewide as part of the WSU
Farmers Market Wireless Technology Project, writing the manuals and
developing the worksheets distributed as a best practice throughout WA state,
now being offered as best practices nationwide through the Farmers Market
Coalition
Farmers Market Bookkeeping Best Practices
Agenda
•
Bookkeeping software
•
Chart-of-accounts
•
Financial reporting and budgeting
•
Tracking multiple currencies
•
Debit & Credit card processing
•
EBT transactions
•
Incentive tracking
•
Q&A
Bookkeeping Software
Farmers Market Bookkeeping Best Practices
Farmers Market Bookkeeping Best Practices
Bookkeeping Software
•
QuickBooks Online: QuickBooks is the accounting application with the largest market share. New to the QuickBooks
approach is an inexpensive online edition that offers an uncomplicated way to do market accounting. It is the most
robust of the inexpensive bookkeeping options, running from $9 a month to $39 a month (ask your accountant about
wholesale pricing).
•
FreshBooks: FreshBooks is very much more oriented toward basic bookkeeping, rather than true double-entry
accounting. It has strong invoicing, time and expense keeping, and optional credit card processing for accepting
electronic payments. There’s a free version of FreshBooks if your market has simple needs.
•
Wave: Wave offers a relatively complete set of bookkeeping tools, and for the most part they are free (you do
occasionally get hit with ads for products and services from other companies — that’s what pays the bills). Wave offers
several products — accounting, invoicing (and invoicing from mobile devices), personal financial management, and
receipt management. Wave does charge for its payroll service, as well as the ability to accept credit card and electronic
payments.
•
Xero: Xero offers three plans, starting as inexpensively as $9 a month and rising to as pricey as $70 a month. The least-
expensive plan limits you to sending five invoices a month, paying five bills, and reconciling 20 bank transactions, while
the two more expensive plans remove these caps and add payroll (in seven states) for either five or 10 employees,
though additional employees can be accommodated for an extra cost.
Adapted from Needleman, Ted. 2015 March 30. Cloud Accounting: Side by Side. Accounting Today.
http://www.accountingtoday.com/news/accounting-technology/cloud-accounting-side-by-side-74132-1.html
Farmers Market Bookkeeping Best Practices
Bookkeeping Software
Needleman, Ted. 2015
March 30. Cloud
Accounting: Side by
Side. Accounting Today.
http://www.accountin
gtoday.com/news/acco
unting-
technology/cloud-
accounting-side-by-
side-74132-1.html
Farmers Market Bookkeeping Best Practices
Bookkeeping Software – Advisable to Upgrade
•
Excel or Checkbook Only
•
No longer a best practice
•
Other free options available
•
Does not adequately track all cash-flow issues (age of outstanding checks, tokens, etc.)
•
Encourages reporting at a transaction-by-transaction level, which causes the group to
micro-manage instead of focusing on the bigger picture
Chart of Accounts
Farmers Market Bookkeeping Best Practices
Farmers Market Bookeeping Best Practices
Chart of Accounts
Balance Sheet Accounts
•
Checking Account
•
EBT Account (Checking)
•
Token Liabilities
•
Debit/Credit Tokens Outstanding
•
EBT Tokens Outstanding
•
Allowance for Doubtful Tokens Outstanding
•
Incentive Liabilities (including A/P to
markets when working in Coalition)
•
Payroll & Sales Tax Liabilities
Income and Expense Accounts
•
Market Fees (Booth & Registration),
Sponsorships, Retail Sales Income (net
of Purchases), Processing Fees Received
•
Donations, Grants, Interest/ Investment
Income, other NFP Income
•
Expenses – Advertising, Entertainment
& Education, Incentives, Payroll,
Professional Fees, Processing Fees Paid,
Rent, Supplies, Travel M&E, Taxes, Other
Miscellaneous Expenses
•
Other Income and Expenses – Donated
goods and services (necessary volunteer
& professional hours)
Financial Reporting and
Budgeting
Farmers Market Bookkeeping Best Practices
Farmers Market Bookkeeping Best Practices
Financial Reporting and Budgeting
•
Budget vs. Actual Report
•
Balance Sheet
•
Coalition reports
•
Farmers markets working to get FINI grant funds or finance incentives as a group may
work under a single market’s name.
•
Be sure the Board of Directors gets reports that break out any Coalition information
from the Market’s information so they can be understood as separate activities. They
do need to be in the same accounting system for tax reporting purposes.
Farmers Market Bookeeping Best Practices
Financial Reporting– Sample Budget (%s)
Income Income Percent of Income
Grants & Donations $ 46,000 38%
Vendor fees 60,000 50%
Sponsorships 6,000 5%
Memberships 3,000 3%
Fundraising - $5,000 10,000 4%
Expenses (5,000)
Total Income $ 120,000 100%
Farmers Market Bookeeping Best Practices
Financial Reporting– Sample Budget (%s)
Expenses Income Percent of Income
Contractors/Employees $ 60,000 50%
Manager Base =
$44,000
Incentive Programs 25,000 21%
Executive Director =
$79,000
Supplies & Equipment 8,000 7%
Note: Labor costs are
covered by vendor
fees
Rent & Utilties 5,000 4%
Entertainment 4,000 3%
Advertising 3,000 3%
Dues 2,000 2%
Insurance 2,000 2%
Excise Taxes 1,000 1%
Per DOR letter ruling
on fees/sponsors
Miscellaneous 1,000 1%
Total Expenses $ 111,000 94%
Cushion in budget for
sustainability
Farmers Market Bookkeeping Best Practices
Financial Reporting – Budget vs. Actual Report
•
Important because it shows the viewer what activities were planned,
expenses which were expected and where the market is in their progress
toward the plan
•
Budget – professional services/payroll (best practices)
•
Expenses – expectations
•
Income – plan on how to deal with expectations (booth fees & registration fees based
on actual expenses and plans for the market, fundraising, grant, and solicitations plans
based on actual expenses and incentive goals)
Farmers Market Bookkeeping Best Practices
Financial Reporting – Balance Sheet
•
Important because it shows the liabilities compared to the cash reserves
ASSETS LIAIBLITIES
Checking $ 5,000 Grant A/P $ 1,000
EBT Account - $5,500 5,000 Coalition A/P -
Restricted 500 Gift Certificate Liability 200
Colaition Account - $17,000 2,000 Payroll Liabilities 1,500
Restricted 15,000 Sales Tax Payable 100
Grant A/R 20,000 Token Liabilities - $5,000 6,000
TOTAL ASSETS $ 47,500 Allowance (1,000)
Incentive Liabilities 2,000
TOTAL LIABILITIES $ 9,800
EQUITY $ 37,700
TOTAL LIAB & EQUITY $ 47,500
Tracking Multiple Currencies
Farmers Market Bookkeeping Best Practices
Farmers Market Bookkeeping Best Practices
Tracking Multiple Currencies
•
Debit/Credit tokens best practices
•
Maintain accurate records of outstanding tokens & incentives – to assure cash
reserves are maintained to cover potential token redemptions in the future
•
Do not allow for payment of Booth fees with tokens – muddies the water when doing
token counts and calculating liability numbers
•
Track all non-token credit card transactions (donations, retail purchases, fundraiser
ticket sales, etc) – required in order to have accurate liability numbers
•
Assure your paper trail is complete in case you are ever audited by the IRS or other
agency (especially important if you are getting federal grant funds)
•
Seems complicated – why bother? Better to have good records and
minimize errors and irregularities, and related costs (actually saves time
and money in the long run, searching down issues, inadequate reserves)
Farmers Market Bookkeeping Best Practices
Tracking Multiple Currencies – Websites for Tools
•
Shamballa Centre website (all tools)
http://shamballacentre.com/cgi/wp/?page_id=81
•
National Farmers Market Coalition website (some tools)
http://farmersmarketcoalition.org/resource/token-accounting-
templates/
Farmers Market Bookkeeping Best Practices
Tracking Multiple Currencies
Currencies
Distributed
to Public
Batch Reports
Manager*
Manual Input
Card
Processor
Data
Manager*
Manual Input
Incentives
Distributed &
EBT Tracking
Farmers Market
Worksheet
Manager*
Manual Input
Accounting
Software
Coalition -
Incentive Fund
Request Form
Bookkeeper*
Manual Input
Accountant*
Manual Input
Coalition -
Incentive
Liability W/S
Currencies
Redeemed
by Vendors
Manager*
Manual Input
Vendor &
Manager*
Manual Input
Farmers Market
Paper Forms
*Manager Input may be
performed by a market
volunteer or other delegate
Farmers Market Bookkeeping Best Practices
Tracking Multiple Currencies – Market Day
•
EBT Tracking Sheet (for use tracking incentives distributed with EBT
tokens)
•
Incentives Distributed Tracking Sheets (for other incentive dist)
Farmers Market Bookkeeping Best Practices
Tracking Multiple Currencies – Market Day
•
Generic Farmers Market Paper Forms – for use tracking tokens and
incentives redeemed by Vendors at the Market
Farmers Market Bookkeeping Best Practices
Tracking Multiple Currencies – Recordkeeping
•
Generic Farmers Market Worksheets – vendor check calculation; tracking
redemptions, distributions, other credit/debit transactions, WSFMA data
Farmers Market Bookkeeping Best Practices
Tracking Multiple Currencies – Recordkeeping
•
Generic Farmers Market Worksheets – batch report input, calculating
liabilities and other WSFMA data, reconciling tokens in hand
• Why reconcile after QB entry?
Catches error and irregularities
• Why do it after every market?
Because then you can more
easily identify and address the
cause of the error or irregularity
on a timely basis
Farmers Market Bookkeeping Best Practices
Tracking Multiple Currencies – Coalitions
•
Incentive Fund Request Form
•
Incentive Liability worksheet
Farmers Market Bookkeeping Best Practices
Tracking Multiple Currencies – Recordkeeping
•
Accounting Software entries
sourced from Worksheets
•
Vendor checks (tokens/incentives
redeemed, fees) from worksheet
•
Batch report deposits into token
liability accounts (and other uses of
dr/cr funds – retail, etc.) from
worksheet & reconcile
•
Journal entries for Incentives
distributed from worksheet
•
Dr. Expense
•
Cr. Incentive Liability
•
Coalition Entries from liability
worksheet & reconcile
Farmers Market
Worksheet
Manager*
Manual Input
Accounting
Software
Coalition -
Incentive Fund
Request Form
Bookkeeper*
Manual Input
Accountant*
Manual Input
Coalition -
Incentive
Liability W/S
Questions & Answers
Farmers Market Bookkeeping Best Practices
Farmers Market Bookkeeping Best Practices
Sheri Muntean CPA PhD
Shamballa Centre
1004 Commercial Ave #1083
Anacortes, WA 98221
sheri@shamballacentre.com
Cell (360) 420-5867
Fax (360) 230-5993
