Politics and finance are two different things, but both need each other in so many political events. Thus, there is no way to separate one from another. Money plays an essential role in arranging political gatherings. Even politicians spend millions of dollars to conduct election campaigns and discuss key agendas to shine their careers.
Despite the budget planning process, they always need the support of expert financial advisors who can maintain their financial records for successfully running their political campaigns.
What is Political Campaign Accounting?
Political campaign accounting is a special branch of accounting that applies to political campaigns and covers a wide area of financial data and reporting. Indeed, this branch of accounting deals with the financial management of political campaigns that relevant authorities organize at a large level.
Financial reporting is the outcome that allows experts to keep a check on the financial system and the current status of political campaigns. However, for the efficient running of political campaigns, an accountant is the right person to contact.
Most importantly, political campaigns comply with US laws and regulations, and the parties involved in this system have to ensure the proper implementation of laws that lead to an accurate and smooth record-keeping process. Here are some responsibilities of an accountant around this campaign accounting:
- An accountant must receive all the finance details to proceed with the reporting whether it be the documents and bank account details of the party.
- A financial advisor must issue payments regarding the cost of a campaign.
- An expert must keep a check on legal formalities around tax requirements.
- A campaign analyst must also manage payroll for the staff associated with the campaign.
- The last and crucial thing for an accountant is to have an excellent understanding of budget, cash, and asset management details.
Did You Know?
“The strength of the Politics lies entirely in the hands of an accountant who efficiently records financial data to prepare the final reports for a political campaign accounting.”
A Brief History Of Political Campaign Accounting
Accounting is the process of recording financial statements to prepare final reports. Besides the basic part of accounting, let’s discuss the historical facts of political campaigns with the connection of accounting and finance. The need for accounting took place for political campaigns in the twentieth century, as there was no concept of political finance management before 1971.
However, some state laws were operational for managing professional finance activities during that time. Additionally, The Federal Election Campaign Act of 1971 started funding political activities, and that accelerated the need for financial reporting. This is why, accountants launched a political campaign process for managing accounting and finance matters during the year 1974.
Furthermore, an accounting campaign opened new opportunities for political parties during the year 1976 and experts added the political accounting process to the branch of accounting. After the amendments, financial advisors started handling finance queries related to political campaigns.
Need for Political Campaign Accounting
Looking at the historical facts about political accounting, we have gone through the need for this accounting system that ultimately flourished the political setups. No doubt, it was difficult for political parties and members to keep a check on their finances including expenses, income statements, and balance sheets.
Thankfully, the launch of the political accounting system made things compatible and convenient for experts to record finances efficiently in the present era. As far as need is concerned, The Federal Election Commission of the US has made these regulations applicable for reducing the hassle of political projects.
Contribution Limits for Fundraising Campaigns
While talking about the contributions to political campaigns, the experts are liable to transfer every contribution within ten days to the treasure with receipt. Not only receipt, they must also provide the profile details of the contributor with a cash amount of more than $50.
Make sure, the experts get the maximum details of the contributor such as name, email address, occupation, and additional information if necessary along with a cash amount of more than $200.
While collecting the information of contributors, accountants are responsible for maintaining the image photocopy of every single check with more than a cash amount of $50. Interestingly, these small contributions played a handy role in 2020 and gathered around $1.8 billion in federal campaign funds.
Financial Reporting and Campaign Management
After you come across the contributions for fundraising campaigns, the primary purpose of political campaign management is to organize finances through proper financial reporting. In addition to funding reports, the best part is to complete the registration and maintain transparency while adding details of the candidates.
Make sure, the reputation of the candidate is a key aspect and that’s why accountants need to maintain the right information especially while recording transactions.
Importance of Political Accounting
Looking at the impact of political campaign management, an accountant needs to ensure these three things to find their importance.
- Make separate accounts for primary contributions and election campaigns
- Deliver pre-election report before 12 days of the election day
- Deliver post-election report within 30 days after the election is over
The best thing is to make efficient use of accounting software to speed up the process of recording and bookkeeping for a political campaign. Fortunately, many accountants follow this practice of organizing accounting and finance operations.
Public Disclosure Requirements for Political Accounting
There is great importance of political campaign accounting for the public as well since the FEC has focused on transparency and decisions that play a key role in organizations. For sure, political parties and accountants have to be on the same page to improve the decision-making ability of organizations in the future.
For this reason, accountants need to maintain a transparent system and that’s the reason they acquire profile details of candidates who are a part of political committees.
Public disclosure requirements are crucial and always guide the general public about the scenario of political agendas. So, it raises awareness among contributors and voters about the political funds being used and offered by the state. The FEC is responsible for ensuring that no crimes occur at the event and using the money collected by voters.
Make The Pro Accountants Your One-Stop Solutions for Seeking Political Accounting Advice
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