Accounting in BerkShares - A Free Seminar
Sent November 9, 2006

On Tuesday, November 21st from 8:30 AM to 10:30 AM, the Southern Berkshire Chamber of Commerce, BerkShares, Inc., and the E. F. Schumacher Society are co-sponsoring a seminar training on accounting techniques for businesses using BerkShares. The seminar will be held at Berkshire South Community Center and is free to BerkShares participating businesses and their staff and to all businesses considering using BerkShares. Please extend this invitation to, as yet, non-BerkShares businesses, so that they can become familiar with operations of the program.

Nancy O'Connor and Alan Glackman will lead the training.

Ms. O'Connor is an accountant with the Great Barrington CPA firm of Smith and Watson. In addition to raising a family, she serves in several community capacities including Vice President of the Chamber of Commerce.

For the past 30 years Alan Glackman was a partner in the Miami, Florida CPA firm of Sobel, Glackman & Sobel, P.A. This year he moved his practice from Miami to Great Barrington where he has an office on Mechanic Street.

Different businesses have developed different approaches to accounting for BerkShares. Ms. O'Connor and Mr. Glackman will describe several in their presentation and answer questions. One approach is outlined below for your information and consideration in advance of the seminar.

If you and/or staff members are planning to attend, please register with the Chamber of Commerce in advance so that we can anticipate numbers. Call (413) 528-4284 or email pjb@rnetworx.com.

In October the BerkShares website averaged 4,700 hits per day according to figures tallied by Zenn New Media which hosts the site. Also of note, The Chamber Executive Network, a publication sponsored by the U. S. Chamber of Commerce featured an article about BerkShares noting the high quality of the notes themselves and congratulating the Southern Berkshire Chamber of Commerce for its leadership role in the program.

BerkShares
P O Box 125
Great Barrington, MA 01230
(413) 528-1737
www.berkshares.org
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One common approach to accounting for BerkShares transactions for a business is to set up a separate current asset "BerkShares cash" account in your Quickbooks program or other accounting programs. At the same time set up an expense line titled "BerkShares discount." BerkShares are cash, so it is also important to establish a secure place for BerkShares-on-hand.

When customers pay in BerkShares, the income is shown as a debit to the BerkShares cash account at the full BerkShares amount and a credit to the appropriate inventory line. The total number of BerkShares-on-hand should always equal the total amount in the BerkShares cash account.

If BerkShares-on-hand are then used to pay another vendor, then the payment is shown as a credit to the BerkShares cash account and debit to the appropriate expense line as you would with purchases made with checks. This is keeps all normal inventory controls are in place. BerkShare payments are cash payments, so it is important, for your records, to request receipts when making payments in BerkShares.

However if you find that you have more BerkShares than can be spent with vendors, then BerkShares may be taken to one of the five participating banks and deposited at ninety cents on the BerkShare. If the amount of BerkShares is 100, then this is recorded as a $100 credit to the BerkShares cash account, a $90 debit to your business checking account, and a $10 debit to the BerkShares discount expense line. The total BerkShares discount is shown at the end of the year as a business expense. It is, of course, the intent of the program, that more business transactions will take place as a result of BerkShares promotion of local businesses, to make up for the discount.

For businesses and organizations using more BerkShares for payment of expenses than taken in as revenue, the process is reversed. If you exchange $450 federal dollars for 500 BerkShares at one of the five participating banks, your checking account is credited with $450, the BerkShares discount expense is credited with $50, and your BerkShares cash account will be debited with $500. You will be holding 500 BerkShares in a secure place waiting to pay bills!!