FROM: Jim Bramer, Retired Auditor CPA
RE: BuxBox, or type of "Spending Control" Accounting Originated: July 2003
E X P L A N A T I O N:
OK OK .... I can hear you saying "What in the world is Jim Bee talking about this time"?
Well, basically "BuxBox" (or "Box") accounting is a way to keep your financial records so that you spend only the balance you have in such a "Box" and it is an alternative to most budget processes A "Box" is where money goes in and goes out and you always know exactly the running balance or how much remains there. 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 mostly pertains to smaller Christ-Centered Ministries and it obviously implies that it is prone to be short of cash to pay for their costs of operation and it needs to weekly answer this questions: "How much do I have this week to spend in my area of responsibility?" 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) is involved, we reference this as QBuxBox , or QBox, and if Mvelopes is involved we reference it as MBuxBox, or MBox. Ask us how the annual Congregational Budget fits into all of this and the use of QBs Class function re meeting this need.
Please Go Here 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 about all of this. Please go to electronic eFinFax 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 the 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 spending group or category.
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
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 get them into the financial transactions in
this manner ..... and not via the monthly statement, etc. Be sure you understand the
recommended electronic eFinFax system.
6. You do NOT borrow internally in order to cover shortages of the GPFund income.
7. Reliable and timely financial reports are a MUST !!!
Please pursue such strategies/tools as the following:
---- Survival ----
Determine well in advance the individual '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 BuxBox, or "Survival" area, by pre-determined order of priority. When that BuxBox, 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.
QB Acct Types
Land, Bldgs & Equipment
Less: Accumulated Depreciation
Less: Mortgage Payable
Less: Land Bldg & Equipment Offset
Fund Balances - Net Assets:
Special Purpose Funds
Approved Donor Restrictions
SetASide for pre-approved purpose
GPFund deficit from previous years
General Purpose Fund
Church Staff Costs
Mortgage & Facility Operating Costs
Program #1 Costs
Program #2 Costs
Total this Year's GPFund
Total Fund Balances
Total Liab and Fund Bal
Click and see contents of colored
Please note the GPFund 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 -- thankfully there is a balance in the Board Discretionary SPFund named "SetASide for Named purposes, etc." If the weekly pledge receipt does not cover the weekly need of $122 (1/52rd of $6,362) then this could be 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 direct you to some 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 (Dollar Accountability Group) Box Detail etc
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. Please see the comments above about coverage of the Operating deficit of prior year, etc. Please Go Here for some more perspective on this type of system and/or process.
The bulk of this Publication originated in July 2003. UPTD: March 09, 2012
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