When I think to, I’ve been posting the snapshot financial statements here, and I’ve been all rah-rah because our negative bottom line has been improving.
Before the AG, I was looking at the financial numbers for February and comparing them to April. And whoa, April showed a reversal of that trend! Bummer. So I asked the financial folks for an explanation.
Turns out there are some hefty expenses that occur once a year, and are recorded in a one-time lump (yeah, I’m not using formal accounting terminology) rather than amortized over twelve months. In April and sometimes May, AML pays renewing insurance policies. Additionally, the recording of member revenue is lowest early in the fiscal year and it increases over the subsequent eleven months as membership rises. The third factor in the “calm down, Robin” explanation is that multi-year dues revenue is shifted incrementally from a deferred liability to recorded income during the course of the year.
I’ll keep an eye on the trend, but I’m certainly understanding that to assess the financial health of the organization, one has to look deeper and wider than just the red or black color of the bottom line on a monthly statement.
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