Starting and Running a Profitable Investment Club

Chapter 21

 

Record Keeping

 

 

One of the most important things to consider when starting an Investment Club is to consider the way the records will be kept. In the book Starting and Running a Profitable Investment Club is a list of 4 ways to accomplish this task successfully:

 

1.    By hand, with one or more club members using NAIC’s Accounting Manual and prepared forms

2.    Electronically, with one or more members using NAIC Club Accounting Software.

3.    By hiring an outside bookkeeper or accountant to maintain the books for the club.

4.    By using a combination of 1 and 3, with an outside service doing the monthly valuation statement and members’ records and a club valuation statement and members’ record and a club member keeping cash records.

 

It is recommended that each and every member be aware of how the accounting system works.

 

There are 8 things that need to be done when setting up your accounting system:

1.    Get a Tax identification Number

2.    Learning to prepare a valuation statement

3.    Decided between the two different ways a valuation statement is prepared

4.    Prepare you first Valuation statement

5.    Learn to Convert the unit value system

6.    Maintain Consistent records

7.    Taking into consideration how you set up your accounting procedures will affect your clubs taxes.

8.    Remember that when you had a new member no large amount of money is needed for that person to join, just follow NAIC accounting rules when adding an additional person.

 

The book suggest that the club needs to go through the NAIC accounting manual thoroughly as a club.