Why a cooperative's bank balance drifts from its books, and how to stop it
A cooperative's books drift from its bank balance mainly because the bank debits transfer charges that were never recorded. KoopManager records those charges at the moment of disbursement, so there is nothing to hunt for later.
The problem: the bank knows something the books do not
When a society pays a loan or member payout to another bank, the bank usually debits a transfer fee, often with VAT and stamp duty, at the same moment. The books normally record only the amount sent to the member, so they say the society has slightly more money than the bank does. One transfer makes a tiny difference; dozens over a quarter make a gap nobody can explain.
Who feels it
- The treasurer finds the difference late, at month-end or year-end, and has to go through the statement line by line to find what was never recorded.
- Exco members who see the bank and the books disagree start to question the whole set of accounts, and a catch-up entry later cannot show which payment each charge belonged to.
How KoopManager resolves it
A society switches on bank charges, sets the rates to match its bank, and sees the charges when it disburses a loan or payout. They are recorded against that disbursement at the same time, and the bank balance falls by the fee as well as the payment. Transfers to the same bank carry no charge, and other bank fees, such as account maintenance, still need to be recorded as expenses.
Related guides
- How to move a cooperative society from spreadsheets to software
- Cooperative loan guarantees explained
- How cooperative dividends work
Try KoopManager
Manage members, savings, loans and reports in one system. Start a 14-day free trial.