Understanding Cash-Basis Dues Timing

Question: Why do payments for next year's dues that are made in the fourth quarter of this year show up in this year's budget?

Because Groupable|m2 keeps your books on a cash basis, income belongs to the year it's received, not the year it's billed for. A dues payment that lands in December 2025 is 2025 income, whether it's paying 2026 dues or prepaying 2027 dues. The Dues Year a payment is applied to doesn't change when the money counts. The date the money arrives does.

This is an IRS-accepted method for dues income, and it's what keeps the Form 990 you or your parent organization files accurate. Income received in a year stays in that year, so you're never reopening a closed year's financials to move money around.

The clearest way to see it is in reverse. If a member who'd been NPD for ten years walked in today and paid off all that back arrearage, you wouldn't reopen the books for each of those ten closed years and post the income back into them. That money is income now, in the current year, even though it settles old dues. Prepaid future dues work the same way, just pointed the other direction. The cash arrives now, so it counts now.

The first year, this will feel strange because you'll see next year's dues sitting in this year's income. It evens out. Every year going forward carries some of next year's prepaid dues, the same as this year did, so the pattern repeats and balances over time. We arrived at this approach after a good deal of research and checking with CPAs on what's acceptable to the IRS for lodge dues income.

Seeing the detail by Dues Year

You don't lose track of which year a payment was for. The Receipts By Year report breaks receipts out by the dues year they were applied to, so you can see exactly how much came in against 2025 dues, 2026 dues, and so on. Open it from a local's Dues & Arrears page by clicking the paid amount for a given year.

If you think you should be on accrual

What's described here is cash-basis accounting. There's a second method, accrual, in which income is recorded when it's earned or billed, rather than when it's received. The two are genuinely different and aren't interchangeable. Groupable|m2 runs on a cash basis. If your lodge or jurisdiction believes it should be on accrual, or you have questions about how this affects your specific filings, that's a conversation for your accountant or your parent organization. 

If you'd like a general primer, Stripe has a plain-language write-up titled "What Is Cash-Basis Accounting" that's worth a read.