Maintaining financial stability
by Keith Sessions, Chief Financial Officer
keithksessions@hotmail.com
The flying season is upon us. I have already put a few flights on most of my airplanes and knocked the dust off of the transmitter and my skills.
Normally at this time, I would be reporting the audit results for 2014. This year, the audit was pushed back to May. As I write this column, it is in progress.
We restructured a few thing in 2014. The result was that the farm income generated at AMA Headquarters is no longer considered taxable income. We also are not required to have the audit completed in the first quarter. By pushing it back to the second quarter, we were able to save roughly 10%. In the grand scheme of things, it is not a tremendous amount of money; however, I am a firm believer in shaving pounds one gram at a time.
The financials of any organization can be viewed like building an airplane. You want to save weight (costs) wherever you can. If you save too much, the structure will not be strong enough to hold up. Add too much weight, and it performs poorly, or not at all. If you have ever built an airplane, you know that a gram here, an ounce there will save a lot of weight in the final model.
Beyond looking for ways to save money, we often look for alternative income opportunities. Some of these create issues such as taxability. Income derived from advertising and other non-business-related monies can be deemed taxable.
When I first took over as chief financial officer, we had enough of a cushion that we were not going to worry about taxes for several years. Last year, that timeframe had compressed significantly. We will continue to look for ways to mitigate taxes, but eventually we will have to pay some.
Our organic growth engine (membership) has been increasing. The economy is doing better, so people have more disposable income. Some of this growth has come from the rise of interest in multirotors. We have debated the retention rate of new members, and specifically multirotor members. Time will tell.
Eventually, the economy will go through a cycle of less growth and decreased new memberships. We are continuing to manage the finances in such a way that the AMA can weather both good times and bad without significant impact to our goal of protecting and furthering model aviation.
I look forward to presenting the audit results in my next column. Until then, I hope I get to see more of you at events this summer.
