In ISA President Judith Martin’s inaugural post to ISA Now she mentioned several new initiatives. One of those undertakings is to change the dues payment and invoicing cycle from a rolling year based upon month of membership to an annual cycle with all dues invoiced on the calendar year. This change will assist ISA in numerous ways, but first a little background.When I joined ISA in 2000 (I can’t believe it already has been 10 years) all members were billed on an annual basis, and the billing cycle was primarily October 1 – Sept 30. Without budgets and strong internal controls in place, it became difficult to manage our finances and we soon found our cash flow to be unnecessarily hampered. In an attempt to alleviate the cash flow problems and more effectively manage membership income, ISA shifted to a rolling monthly dues invoicing process. ISA also procured a bank line of credit to aid in cash flow during the year. This worked well for a while, and then as the economy turned it became more and more difficult to pay off the line of credit and to plan for future cash needs.
After closing the Seattle office and hiring Sentergroup to manage operations, we have been consistently receiving professional financial advice from Sentergroup, ISA attorneys and our new CPA firm. These professional advisors have been instrumental over the past 18 months in aiding and supporting ISA and the Board in reducing our outstanding debt, creating realistic budgets and managing cash flow. They have also assisted in implementing financial industry standards and internal controls while supplying organized monthly accountant-reviewed financial reports. Our advisory team also recommended that ISA close the line of credit, noting to the ISA Board that it is very rare for a not-for-profit membership association to have or even need a line of credit. The ISA Board of Directors accepted the advice, and converted the line of credit into an amortized loan with a small balloon payment. Soon that too will be paid off in full.
ISA has close to 800 members with nearly 60% renewing dues in September. The other 40% is spread out over the other 11 months of the year … not a very efficient system for invoicing or tracking. The next recommendation from Sentergroup and our accounting firm is to shift the membership dues cycle from the existing rolling method to a calendar year cycle to align with our fiscal year. This will support staff and benefit ISA members in several ways:
- We will have stronger membership management capabilities and be able to better track and follow membership renewals and attrition
- We will know sooner and earlier in the calendar/fiscal year if there are financial indicators on the horizon (both good and bad)
- Invoicing and membership record updating will be more efficient, as will the accountant’s monthly review and reconciliation process
- We will process membership renewals only once instead of 12 times a year, allowing more time to focus on advancing and strengthening the Society
- The dues invoicing change will benefit staff efficiency, create economies of scale and save ISA staff and members both time and money
As a banker in a previous life who reviewed many financial statements and made many loans to small businesses, and as Treasurer of ISA I am pleased to see the progress ISA has made in such a short period of time. ISA's accomplishments and societal growth show what a dedicated membership, board and management team can accomplish by working together. Should any members have any questions about this upcoming change, please feel free to contact me at toddsig01@gmail.com or our Executive Director Joe Jackson at jjackson@thesentergroup.com.
Todd W. Sigety, ISA CAPP
Treasurer, ISA Board of Directors
No comments:
Post a Comment