Services Built Around Your Club’s Unique Profile

Private club accounting has many unique characteristics, like how to account for different revenue streams, amenities and special purpose funds. When you need to make capital improvements, how will you justify the cost to members? When the board requests financial and operational performance metrics, how do you know where you stand? The power of the accounting and auditing function in private clubs lies in its ability to present complete financial data about club performance – if done properly. Get clear financial guidance from the hospitality industry experts at PBMares through:

• Annual and period-end financial statement audits, reviews, and compilations
• Accounting cycle control studies: inventory, revenue, and payroll
• Accounting policy and procedure manuals
• Financial reporting analysis and best practices
• KPIs and benchmarking ratios

• Initial plan audits
• Multi-plan audits
• Defined benefit plan audits
• Defined compensation plan audits
• Representation before the DOL and IRS

• By-laws and articles of incorporation
• Strategic planning
• Fiduciary responsibility
• Capital planning
• Business planning

The amount of information clubs have on their members is staggering. Think about it. You have personal contact information, credit card numbers and bank account numbers. Add to that your own financial records. Many people within you club have access to this information so it’s imperative that you are proactive in taking steps to safeguard against cyber-attacks and fraud. We can help your club implement the following cybersecurity measures:

• Intrusion testing
• Information security audit
• IT strategic planning
• Disaster recovery
• Infrastructure assessment
• Risk assessment, including firewall security, password security, and testing for vulnerabilities in phishing
• Staff training and education

What would you do if you suspected an employee was stealing from you? Private clubs often struggle with adequate staffing in the accounting department and enforcing segregation of duties. Even the best fraud control measures can’t prevent all types of fraud, but there are steps your club can take to minimize risk. We can help with:

• Internal control studies
• Cash management policies
• On-site and field testing
• Fraud detection
• Staff training and education

• Arbitration
• Expert witness testimony
• Forensic accounting
• Valuation reports

You’ve worked hard to attract top talent to your club. Training is expensive and turnover affects a club’s performance and bottom line. To stay competitive and keep your employees happy, the club has decided to offer a retirement plan. You need guidance to determine which benefit plan option is the right choice for your club. Even more important, the plan’s investments need to be managed to maximize the benefit for your employees. PBMares offers third party administration services to assist clubs in designing and administering a range of benefit plans, including:

• Defined compensation and defined benefit plans
• Health and welfare plans
• Employee Stock Ownership Plans (ESOPs)
• Form 5500 filing
• IRS and DOL audit preparation

The question of club privacy is complicated. While there are federal laws that benefit private clubs, such as delayed or limited compliance with ADA standards and tax-exempt status, the club must be truly private to benefit which may limit usage by nonmembers. When dues make up the largest portion of club revenue, the decision to selectively choose membership is an important one. Our Hospitality Team has consulted on a wide-range of club privacy issues such as:

• The impact of losing tax exempt status
• The extent of non-member access to facilities
• How to select and recruit new members
• Whether to restrict membership to certain groups

Tax strategy for private clubs is unique. There are various provisions and requirements related to maintaining tax-exempt status and deal structuring, and specialty tax credits and deductions are available to those who look and plan for them. Beyond simply annual tax compliance, we operate as a partner in ongoing tax planning and strategy. We can help your club with:

• Federal, state and local tax planning and preparation
• Deferred tax on reinvested property
• Capital gains tax consulting
• Specialty taxes, like entertainment and sales and use
• Form 990 assistance
• Representation before the IRS and other taxing authorities

When private clubs are taxable and member-owned, it triggers a unique tax designation—Section 277 of the Internal Revenue Code. Many different rules apply, such as revenue from non-members cannot be used to offset losses from members. When a private club doesn’t separate member from non-member income, there can be significant tax consequences. The Hospitality Team at PBMares can help with Section 277 issues like:

• Keeping track of income sources
• Method of recording income
• Proper treatment of investment income
• Structuring capital contributions
• Separating income from operating and capital accounts

Clubs receiving unrelated business income are taking advantage of revenue-generating opportunities, but need to be diligent about reporting and compliance. There are thresholds a club must meet to maintain tax-exempt status. Failure to properly allocate and report unrelated business income triggers an unwelcome call from the IRS. Let us assist your club avoid UBIT traps by helping you with:

• Understanding and reporting the difference between investment income, reciprocal income and non-member club use
• Tracking UBIT amounts and reporting requirements
• Allocating appropriate revenue from rooms in city clubs
• Allocating UBIT expenses