Thoughts on Cost Accounting

With the hope of saving some discussion time at the meeting, I will lay out my thinking here. Basically, there are two reasons for counting the revenue this way.

The first is that it makes sense. I believe the venues should get revenue credit for all the money they bring in, even if it appears to be tangential to their primary mission. The Minstrel gets credit for food donations, for example. The Festival gets credit for the Boutique. Why not memberships? The Minstrel MC makes a "become-a-member" pitch each week, and the Minstrel staff is involved in processing the renewals. We know that many people renew their memberships (or become members) to qualify for the Festival discount. Pretending that the membership decision has nothing to do with the what happens at the venue level is a very narrow interpretation of what's really going on.

The second reason is that it's practical. QuickBooks uses "invoices" to capture incoming revenue, and a single invoice can't be directed at more than one department. Doing it this way, I can capture everything associated with the Minstrel on a single form, which maps to a single tally sheet. Splitting it up would require two or three different transactions. That makes more work for the Treasurer and adds complexity to the process. Why would we want to do that?

Admittedly, this model breaks down if it involves two different profit centers. That is, the Minstrel can't get credit for Special Concert tickets, since that revenue belongs to another department. But as far as G&A type revenue (Dues, Donations, Merchandise, etc.) why shouldn't the venues get the credit? They're doing the work.

Anyway, given that it's sensible, simple and provides additional insight into what's going on, I believe it's the right approach. I intend to keep doing it this way.

And in closing, I'd like to add that the principle of "How It Was Done in the Past" is not a compelling argument for continuity, in my opinion. (Is this the kind of thing Andy was thinking about, when he said last month that we were hostile to change?)

Chris Riemer