Year-end closing and surplus appropriation: how a cooperative shares its surplus
At year end a cooperative has to close its books and decide where the surplus goes. KoopManager works out the surplus from the year's records and records the split the Exco chooses, in stages if needed, with every step reversible.
The problem: the year-end figures are rebuilt by hand
At year end the treasurer rebuilds the figures from several spreadsheets to find the surplus. The Exco then debates how to share it among reserves, funds and a dividend. If a figure changes after the meeting, nobody can show what was decided or what the books said before.
Who feels it
- Officers rush to produce a surplus the Exco and the auditor can trust, and carry the blame if it is corrected later.
- Members hear about the dividend at the general meeting without seeing how the surplus was reached.
How KoopManager resolves it
After the financial year ends, an administrator closes it. KoopManager works out the surplus or deficit from that year's ledger and posts the closing entries. The Exco then allocates the surplus to the accounts it chooses, such as a statutory reserve, an education fund or a dividend, as a percentage or a fixed amount for each line.
The allocation can be made in stages, and any part not yet allocated stays unallocated. A closing or an allocation can be reversed with mirrored entries, so the history stays intact. A dividend moves on to a per-member distribution that needs approval before payout.
How the surplus is split is for your bye-laws, your general meeting and your regulator or federation, not for the software.
Related guides
- How to move a cooperative society from spreadsheets to software
- Cooperative loan guarantees explained
- How cooperative loans are approved and repaid
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