- - - Rejoice in the Lord always ... again I say Rejoice !!! - - -

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                               TO:  Interested Ministries                                                                                                           FROM: Jim Bramer, Retired CPA-Auditor
                                                                                                                                                                                         FILE:  0002-99/all

                               RE:  BuxBox, or type of "Spending Control" Accounting                                                  Originated:   July 2003   

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    E X P L A N A T I O N:

    OK   OK .... I can hear you saying "What in the world is Jim talking about this time"? 
    Well, basically  "BuxBox"  (or "Box")  accounting is a way to keep your financial records so that you spend only what you have on hand  and it is an alternative to most budget processes   A "Box"  is where money goes in and out and you always know exactly how much remains.   Some of us will better identify with the following terms:    ENVELOPE , BAG, POCKET; or even BILLFOLD or PURSE ----  or maybe even a specialized FUND.   Please  Click Here  and notice how I have used this term in that particular setting.
     By whatever name, the "Box" (I'll call it "BuxBox" in this writing)  system usually pertains to smaller Ministries and it obviously implies that the Ministry is prone to be short of cash to pay their costs of operation, etc.  Or it is a process that assists Ministries that have operated at a deficit in the past to 'right their ship', etc.
     When QuickBooks (QBs)  or Quicken, is involved, we reference this as QBuxBox  , or QBox,  and if Mvelopes is involved we reference it as MBuxBox, or MBox. 
     Please go to  0601  for some more information about what we call the  QBs Fund Accounting Method Number 3.  Also go to  this  SPENDING CONTROLS  web site for more assistance along these lines.  Please go  to  FinFax  and learn how this system functions.   This "Bux Box"  process could function at a Ministry in the following manner:

>>   Remember (2), this only pertains to the Ministry's General Purpose Fund (GPFund), or to undesignated/unrestricted money that comes into the Ministry and you as Ministry leaders decide how to spend it in carrying out your exempt purpose, etc.  The administration of the GPFund could be viewed as "We-Shalt" and the SPFunds below could be viewed as "Thou-Shalt." 
>>   It does NOT pertain to Special Purpose Funds (SPFunds), or to designated/restricted money that can only be used for the indicated purpose.
>>   The Ministry determines in advance which GPFund expenditure groups are to be paid in order of priority and you establish a  "Bux Box"  for each group or category.   
>>   Then when GPFund money comes in, it is placed in priority order into the applicable "Bux Box".
>>   If said "Bux Box" has any money in it, then you can spend, etc.
>>   This "Bux Box" effort is an attempt to respond to such things as:

I S S U E S:

1.    "Undesignated/Unrestricted Income" must be handled prudently.
2.    Ministries need strategies and tools in order to do this.
3.    Within Ministries, such income is often sparse and must be closely monitored.
4.    Regardless of the authorized Budget, the Ministry Finance Team can only spend what they have.
5.    If purchases are made via a Charge Account, or via Credit Cards (any type of Plastic), an option is for you to pay them weekly and not via the monthly statement, etc.  Be sure you understand the recommended FinFax system.
6.    You do NOT borrow internally in order to cover shortages of such income.
7.    Reliable and timely financial reports are a MUST !!!

STRATEGIES/TOOLS:

  We recommend such strategies/tools as the following:

---- Survival ----

        Determine well in advance the 'must pay in order to survive' items. Examples might include fixed operating expenses like: >>  Operating salaries/benefits; >> Facility repetitive expenses (rent or mortgage; utilities, etc). Each Ministry decides what "Survival" means to them.

---- Assignment ----

        Then when "undesignated/unrestricted"  GPFund money arrives, it is immediately assigned to the applicable Bux Box, or "Survival" area,  by pre-determined order of priority.  When that Bux Box, or "Survival" category,  has enough money,  any residual is available for the next authorized priority area.

---- Weekly Report ----

        The effect of the above process is shown in the following sample weekly financial report.  

Acct Types	Assets:
Bank	Checking- Savings		$ 16,787
Fixed Assets	Land Bldg & Equipment
	Total Assets			$16,787
	Liabilities:
Acct Pay	Payables		$ 1,689
	Fund Balances - Net Assets:
	SPFunds
Equity	Approved Donor Restrictions	$        700
Equity	Building Fund	$     4,000
Equity	SetASide for Named Purpose	$   15,774
Equity	(Deficit) from last year	$   (6,362)
	Total SPFund		$ 14,112
	GPFunds
Equity	Church Staff Costs	$       562
Equity	Missions Costs	$       234
Equity	Mortgage & Facility Operating Costs	$         56
Equity	Program #1 Costs	$         34
Equity	Program #2 Costs	$       100
	Total this Year's GPFund		$ 986
	Total Fund Balances			$15,098
	Total Liab and Fund Bal			$16,787
	Click and see contents of colored Hyperlinks above

   Please note the deficit above of  $6,362  from the previous fiscal year.  Constituents have pledged (Faith Promise, etc) to cover this deficit as it was inappropriately borrowed from the SPFunds.  If the weekly pledge receipt does not cover the weekly need of $122  (1/52rd of $6,362) then this is the first weekly assignment priority.

   Other detailed reports might flow from the Computer software known as QuickBooks (TM) (QB) - as structured specifically for the needs of such Ministry.  The links below are to Personal Finance detail tranx report samples.  They very much resemble what some of the Bux Box system reports would also look like.

Check Stub  report 

DAG Box Detail etc

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COMMENT ABOUT CHURCHES:

        In this setting, Church leaders must know soon after the Sunday offering just exactly what there is to spend for ministry and/or operating costs.  It would seem that Survival issues pertain to costs in the following order of priority. 1st - Sal/Benefits; 2nd - Agreed commitments or installments; 3rd - Other fixed operating costs and if anything remains, then 4th - necessary Ministry spending in approved sequential order.  See comments above about coverage of the Operating deficit of prior year, etc.  Please go to  0002  for some more perspective on this type of system and/or process.

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          The bulk of this Publication originated in July 2003.   UPTD: July 04, 2008   

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       (1) An Online Document, or WRIT (Writing), may be applicable to all Ministries, or it may be designed for just groups like: Evangelical Church, School, Missionary Agency or Organization, Christian Camp / Conference, or other named group.
        (2) WRIT formats include the perspective of   Jim@bcidot.org  via IOMs (Inter-Office Memos) to the Ministry Finance Team (MFTeam); THRDs, a hypothetical Online conversation with members of the MFTeam; GLEANINGS, or Scripture within context of the MFTeam; FWIW; A periodic editorial (For What it is Worth); TRUISM, or believed Ministry Finance principles; and FAQ, response to Frequently Asked Questions

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