Cooperative society glossary: terms every member should know

Definitions

• Exco: the executive committee that runs the society day to day.
• Bye-laws: the written rules that govern the society, including membership, contributions, loans and dividends.
• Member: a person admitted to the society who saves, and may borrow, under its rules.
• Contribution: a regular payment a member makes into the society.
• Savings: money a member has deposited with the society.
• Share capital: the funds members pay in as their ownership stake in the society.
• Loan: money the society lends to a member, repaid on an agreed schedule.
• Guarantor: a member who backs another member's loan.
• Guarantee exposure: the total a member has guaranteed across active loans, often compared with that member's own savings.
• Disbursement: the payment of an approved loan or withdrawal to a member.
• Loan book: the society's full portfolio of loans and their status.
• Surplus: what remains when income exceeds expenditure for a period.
• Dividend: a share of the surplus paid to members under the society's rules.
• Ledger: the accounting record of the society's transactions, organised by account.
• Trial balance: a list of ledger balances used to check that debits equal credits.
• Bank reconciliation: comparing the society's recorded bank balance with the bank statement and explaining any difference.
• Bank charges: fees, VAT and stamp duty a bank debits from the society's account, for example when money is transferred to another bank.
• Dual approval: a control where two different officers must approve an entry before it takes effect. It is also called maker-checker.
• Payroll deduction: a contribution taken from a member's salary by their employer and paid over to the society.

• Why a cooperative's bank balance drifts from its books
• Cooperative loan guarantees explained
• How cooperative dividends work
• The financial reports every cooperative Exco needs
• When one officer controls the money: how dual approval protects a cooperative
• Month-end contributions: why matching payroll deductions to members goes wrong
• How to move a cooperative society from spreadsheets to software

A note on your own rules

Societies differ. Always check your own bye-laws for how these terms apply to you.