Buying Cycle                   0013-01          ZZall

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

                    TO:  Interested Ministries                                                                                                                     FROM: Jim Bramer, Retired CPA-Auditor
                                                                                                                                                                                        FILE:  0013-01/all 

                     RE:  Buying Cycle                                                                                                                                 Originated in 1998             

            A suggested Ministry "Buying Cycle" embraces such things as the following:

  •   A determination is made by the Ministry leadership as to what expenses are needed to carry out the exempt purpose of the organization, then various Ministry Departmental  Budgets  are developed and authorized----
     
  •   The authorized Departmental Buyer discovers if  GPFund  monies are available;
     
  •   When appropriate, like Events, the Buyer prepares the applicable Form (showing authorization by Department, etc.) and obtains Advance funds -----  Please go to  0112  for a paper regarding Advance/Petty Cash details.
     
  •   Most all items are purchased from Vendors via the applicable "buy now and pay later" systems.  Please see below for authorized buying via Plastic as the Ministry then only has to monthly remit only one check (to the Credit Card Company and not to each vendor, etc.).
     
  •   The Buyer contacts the applicable Vendor and makes the purchase, primarily using an Authorized Plastic in lieu of a Purchase Order System. See  0114  publication for more specifics.  We believe that the proper use of the Plastic does away with the need to have purchase orders, or P.O.s. 
     
  •   The Plastic charge slip is attached to the applicable form when purchase is picked up by the Buyer, or their authorized agent.  Such forms, of course, ultimately get to the Accounting Department as the Buyer indicates authorization, the Department Code and applicable dates.
     
  •   When purchase is made by phone it ultimately results in an invoice being mailed to the Ministry by the vendor. The person opening the mail inserts the day received and affixes a Rubber Stamp thereon and routes it to the Buyer. The Rubber Stamp includes information so the Buyer can indicate authorization, department code. They then route it immediately to the Accounting Department.
     
  •   In the Accounting Department the purchase is booked right away and charged to the applicable Department as a charge against their authorized budget.  Any time after this they can provide Departments with the latest "Actual to Budget" status. A sample is at  0706.  Plse also see the weekly ATF system when you  Click Here.
     
  •   The Accounting Department then pays the Vendor (primarily the Plastic Provider) at the expected and agreed time at least once a month - one option is to pay it weekly. This allows the Ministry to write one check to the Plastic Provider a month rather than to each vendor, etc ... and to be a good steward of the money on deposit. ALWAYs pay the Plastic Provider on time so that you NEVER pay any Interest or loan charges. 
     
  •   Since the check actually going to the above Vendor is at the very tail end of the financial transaction, or "way after incurring the financial obligation", such a process should NOT have to pass muster via Check Signors. Or the check payment equivalent can be accomplished via available Online Payments resources.  Here money is transferred, under a controlled environment and at the Ministry’s request, from your Bank Account to the Vendor's Bank Account with no need to always get a piece of paper (the check) from one place to another.  For some Checking Signing thoughts please go to  0066
     
  •     Some times the Volunteer buys things using their own resources and wants to make a donation.  This is ideally done via Church Credit Cards, since the issuance of the Credit Card to the Volunteer actually provides pre-approval, etc.  Such transactions need to flow through the books for two reasons: a> The leadership needs to know what the activity really costs  b> The donor needs a donation receipt.  Ask us if you need more info as the Ministry writes a check to itself and such check is processed along with all of the other Donations as a credit to the Volunteer/Donor, etc.  Of course, if a volunteer uses their own resources to make a Ministry purchase, they must get advance approval before they are reimbursed, etc.

                              

   The bulk of this Publication originated in November 1998 and was  .    UPTD: May 02, 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