BuxBox Accounting 0002-99 ZZall Bux Box Accounting 0002-99 ZZall
 

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


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

                               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.  

        >>     
Then when GPFund money comes in, it is placed in priority order into the applicable
"Bux Box".

        >>       If said
"Bux Box" has a running balance or 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
          there is.

   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 d
o NOT borrow internally in order to cover shortages of the GPFund income.

   7.    
    Reliable and timely financial reports are a MUST !!!

STRATEGIES/TOOLS:

                    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

Assets:

Bank

Checking

$ 500

Bank

Savings

$ 16,287

Fixed Assets

Land, Bldgs & Equipment

200,000

Fixed Assets

Less: Accumulated Depreciation

-45,000

Fixed Assets

Less: Mortgage Payable

-55,000

Fixed Assets

    Less: Land Bldg & Equipment Offset

-100,000

       Total Assets

$ 16,787

Liabilities:

Acct Pay

        Unpaid Bills

        $ 1,689

Fund Balances - Net Assets:

Special Purpose Funds

Equity

   Approved Donor Restrictions

 $        700

Equity

   Building Fund

 $     4,000

Equity

   SetASide for pre-approved purpose

$   15,774

Equity

  GPFund deficit from previous years

 $   -6,362

            Total SPFunds

    $ 14,112

General Purpose Fund

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 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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