Webinar with Megan Knab from Veriledger -- Treasury Management & Crypto Accounting Questions
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Date: Jan 24th, 8AM PST ([Add to Calendar with email reminder](https://teamup.com/event/show/id/7dNSzVSSki53nbMafRkkGK5kd5sFjc))
Conference Link: https://zoom.us/j/767928217
Video Recording: https://zoom.us/recording/share/wOxdfH5gQymvG_6ed6oE4ESDH1afk6JykBy0Oa3EyOywIumekTziMw
EthMagicians Forum: https://ethereum-magicians.org/t/community-call-with-megan-knab-treasury-management-crypto-accounting-jan-24th-2019-8am-pst/2420 (notes posted to this thread)

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Megan from [VeriLedger](https://veriledger.io) has volunteered to run a short webinar and Q&A on Treasury Management & Crypto Accounting.

## About Megan

Megan’s professional experience and personal interests revolve around building efficient systems. Megan is the founder of VeriLedger, a project that is working to streamline bookkeeping and financial reporting for crypto-enabled businesses. Prior to founding VeriLedger, Megan was an early member of a cryptocurrency agency brokerage project out of ConsenSys. Before that, she consulted with a venture capital firm focused on making investments in the blockchain ecosystem as well as worked at an AmLaw 100 firm in financial operations. She wants to make financial management and transparency easier for companies.

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## Questions

_Below are some of the topics that Megan intends to cover as well as questions from the community. Please add your questions and indicate your name / handle if you'd like to be notified_

### Megan: Financial Reporting v. Tax Reporting

### Megan: What metrics can you use to manage your crypto treasury?

### Megan:Crypto bookkeeping best practices

### Megan: Accounting edge cases - (hard forks, air drops)

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## Notes

Budget v actual analysis template https://docs.google.com/spreadsheets/d/1OzM7xu1ss9JJCT5hscIdm_f7QYoT4DMBVCpEZr76Cmg/edit?usp=sharing

High volume & categorizing transactions is a big pain for accounting

Talked to a lot of people, nothing quite ready

Talked to accounting firms about outsourcing -- not that many accountants / book keepers that know anything

Also expensive

Concept of Veriledger -- automate super simple accounting procedures -- take in data, GAAP standards, international accounting standards

Normal non-crypto, lots of software for automating biz process -- lots doesn't in crypto

Not technical -- accounting person

Veriledger -- integrating Exchanges and pulling data off of Ethereum
- not just value of portfolio, but simple General Ledger stuff
- creating financial statements
- running a budget
- release in April

Crypto Book-keeping 101

Chart of accounts
- Before Quickbooks etc.
- actual journals kept
- most enter in general ledger
- assets, liabilities, equity, revenue, expenses
- first three are balance sheet -- other are income statements
- PNL for Proft and Loss

Find templates online
Using QB or Xero
Megan has a template -- can share
Chart of Accounts won't fit business perfectly
Nature of operations -- level of granularity

What is your business doing?

Chart of Accounts tailored to Domicile -- esp for tax payments

If you have an international business you need a chart per entity -- roll up for consolidated

How to categorize those kinds of transactions?
have a methodology that works for me (Megan)

Financial reporting vs. tax reporting

Chart of Accounts is for financial reporting
Having an account for ForEx differences, fair market value, having something that holds gains or losses

I (Megan) likes a lot of granularity

James Q: templates for chart of accounts

LLC, Service Based business

Don't touch chart of accounts once setup

Little accounting annoying thing -- e.g. different tax accounts

Setting up a budget
- have a template -- HackMD
- Boris: share link on EthMagicians
- some people put budgets into another bucket

Reconciliation process
- tagging transactions to the ledger
- month is standard process

When going through crypto transactions
- cost basis -- biggest pain points
- price per coin that you paid

Other areas of world, taxed as asset, on cost basis

When you pull off exchanges, don't have cost basis

Pulling Wallet history off etherscan -- cost basis not included

5 day rolling average, closing price on Coin Market Cap
Document
Write a policy in your teams Google Drive
Trade off between precision

https://www.coingecko.com/en/coins/ethereum/historical_data/usd#panel

Equivalency in native currency -- USD, CAD, etc

Need to write it down

Can be annoying -- making it easier

Once you create good habits

Creating an audit file

Certain software like Quickbooks, Xero -- can upload support

File folder that has logical organization

Taking in revenue in crypto
Best practices -- convert it to fiat right away
Once you get it, it's Fair Market Value

Want to convert it right away

Coinbase, BitGo -- do it right away

Bryant: what about DAI?

Doesn't mean you don't need to track cost basis

G-USD -- where it literally is a fiat tie (Gemini) -- regulated exchanges, Circle too

Having audited financial statements -- most small companies don't need it

Investors

Line of Credit

Expensive -- have to hire them to come in
Months long, sitting with the audit team

Budget to Actual -- do a variance
Pop the real, actual numbers -- column that will populate the difference

Last piece -- taking a moment, to reflect on your numbers

Are these numbers telling the story of your business?

What we were going to do?
We were going to do ETH -> DAI
Have someone pay expenses, give DAI to them?

- if you are transacting in and out of crypto, always taxable
- if you're paying people back -- not paying employees in crypto currency W2
- coal miners being paid in coupons
- W2 have to be paid in

Figuring out how to financially empower EthMagicians, open source groups

I (Megan) want to get involved more in open source, why not just create a

What we are trying to do -- other cool groups -- Digital Chamber of Commercie -- AICPA(?) are paying attention

Consensys has done lots of lobbying

This is how it should be -- this is how we're treating it

Another mission, let's create a good standard -- methodology for calculating cost basis

## Treasury Management

Emotional constancy exercises -- trading in traditional markets, and especially in crypto markets -- is an emotional process

Make logical, financial based decisions

All about setting parameters

When you're doing your budget

One of the things you should be paying attention to

Once you have that for the next 3, 6, 12 months -- if you're levered -- if 80% of expenses is fiat currency, if your portfolio is 50% crypto

Trying to bet, is not a good way to manage your business

At a regular point -- depends on the wick of the portfolio

Maybe it's once a week, once a month

Rebalancing with your liabilities

Risk tolerance

Convert back to USD

Measuring your crypto portfolio -- to USD

Continue to keep it in portfolio

But also taxes from profit taking

Flip side -- working on escrow service
Need a lot of that native currency in their reserves
Need to pay for gas fees

what is the lowest price you'll tolerate (stop gap) -- before you liquidate

what is reasonable profit margin on crypto? 30x?

principles -- like stop gap, is a good policy
memorialize

incorporation documents

Policy folder --

Liquidity strategy

Simple to say -- making sure you are in the right exchanges

Making sure you can trade out of alt coins

Prepared to press a button

People who "donate" -- can't take that as a deduction

Closing after big events

Recommend -- working through reconciliation

Organizational wallet
- using a multisig
- keeping public address in chart of accounts?
- it's possible to do?
- implicit in USD -- break it down by asset
- aggregate all ETH
- exchange account or wallet

Veriledger

Quickbooks plugin

Accounting leave a lot to be desired

Open source

BeanCount http://furius.ca/beancount/

TO DO:
- multisig additions
- write down policy for expenses
- going back paying Boris back for Berlin while applying policy
- 2018 "books"
- budget
- per event budget
- open collective

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###### tags: `ethmagicians` `community call` `treasury management` `crypto accounting`