How the Quartermaster/Post manage funds is really up to the post, as long as they use "accepted banking practices". This can be anything from the classic VFW Ledger Book to a full fledged accounting system.
A version of a classic VFW Ledger Book
|12/17||Beginning Balance ||1,000.00||500.00||0.00||400.00||100.00|
|8||Joe Memb Dues||v0122||40.00||10.00||30.00|
|31||Ending Balance ||1,110.00||510.00||0.00||500.00||100.00|
You record transactions in a classic ledger book. All accounting systems, even the basic ledger follow what is called the Accounting Equations: (Assets = Liability + Owners Equity). This is often expanded into: Assets - Liabilities = Equity + (Income - Expenses). In the basic ledger, we really only deal with Current Assets, basically you bank accounts. Equity is for the most part your opening balances. One of the problems with the basic ledger is there is really not any detail on where a transaction fits into the equation.
I am not an accountant, but I've worked with "Bean Counting System" (as I call them) for the last 30 years. A little better explanation of Account Principles can be found on the GnuCash site.GnuCash Basic Accounting
In the above example the four sample transactions can be described as:
You start off with $1,000 in the bank, distributed between four funds (Consider FundX as a temporary fund or some other fund that you track). You have no liabilities, income, or expense and your equity is the opening balance of $1,000. Your accounting equations is now:
$1,000 - 0 = $1,000 + ( 0 - 0) or $1,000 = $1,000
When Joe Memb pays his $40 dues, you split the $40 into the General Fund and the Dues fund. The dues fund is really a Liability account. While you collected $40, you own National $30 and they are going to take it out at some point (or you have to send it to them). The $10 that goes into the general fund (there is no longer a requirement for a Dues Reserve fund) is really Dues income or revenue, even that it is not clear in the paper ledger. Your accounting equation is now:
$1,040 - $30.00 = $1,000 + ( $10.00 - 0) or $1,010 = $1,010
When you pay the $300 electric utility bill, the $300 is and expense that you pay out of your operationg or General fund. Again it is not clear that the decrease in the General fund is for a Expense:Utilities:Electric - it's just an expense that decreased your Current Assets. Your Accounting equation is:
$740 - $30.00 = $1,000 + ( $10.00 - $300) or $710 = $710
When National does a Electronic Fund Transfer (EFT) and take $30 out of your bank account, you've paid off the liability. Your Accounting equation is:
$710 - 0 = $1,000 + ( $10.00 - $300) or $710 = $710
During the Post Membership meeting on the 12th, the Membership freaked out when the Quartermaster reported that there was only $740 in the bank account and $30 of that was owed to National for dues. They decided to have a Fund Raiser on the 19th and put 25% of whatever is raised in the Relief fund and the rest in the General fund. $400 was raised, which is really Income:Donations and $300 put in the General fund and $100 into the relief fund. Your Accounting equation is:
$1,110 - 0 = $1,000 + ( $410.00 - $300) or $1,110 = $1,110
At the end of the year you have $1,110 in the bank. Your income was $410 and your expenses were $300 so your profit was $110 - the membership is happy. While the paper ledger does not clearly explain what really happed, the Quartermaster and/or an Auditor should be able to explain what transactions took place and how the accounts balance using the Accounting Equation.
If a Post does not have a Post home, the number of transaction you have in any given month are probably small enough that you can use this simple accounting tool. Your expenses are probably limited and you may be able to meet those expenses with dues and income and small fund raiser. Buddy Poppy drives will provide funds where the Relief fund can still help Veteran-In-Need.
If you have a Post Home, especially with a club/canteen or rental facilities (e.g., Fair Grounds, Auditorium) you will have many more expenses (insurance, taxes, etc) and have other income. The paper ledger will cause you more heartache than you need. You may also need a CPA or Accounting Service to adequately manage your accounting. This is where I've used GnuCash to remove the heartache and provide adequate information to our Accounting Service and the Post Membership.