Accrual Basis- Beyond the Bank Balance, 0058-01 ZZall

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

                          TO: Interested Ministries                                                                                            FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                                                                    FILE: 0058-01/all

                           RE: Beyond the Bank Balance                                                                                 Originated:   December 1999                                       


        My wife has done some work as a "Mock Shopper" for an organization called "Beyond Hello". This company helps a retail store know how their employees are treating customers. They do this by having a "Mock Shopper" come in and buy something, take it from the store and then return it for a refund. The Mock Shopper report can be very helpful in evaluating employees and procedures.


           The  Ministry Finance Team  and respective Staffers need to know more than the "Bank Balance" in its stewardship of financial resources. Knowing how much money there is in the Bank is essential, but there is more to the equation. It is also vital for you to know the result of Non Cash financial transactions. It is critical, for example, to know the effect of Monies owed to you and Obligations or Bills payable that you have assumed    But mostly it reminded me that there is more relevant financial information "Beyond the Bank Balance."
Be sure and Go Here  and learn about the  eFinFax  method of weekly reporting of all Ministry money spent regardless of how.


Some Non-Cash examples appear below:

    Money owed to you ----

  • Regular Accounts Receivable
  • School Accounts Receivable (Schar)
  •         Usually in Monthly installments

Obligations include:      

  •   Amounts due on Credit Cards or to Vendors
  •          To be paid momentarily
  •          Go Here for info about weekly payment of Credit Cards
      Restricted Donations
  •          To be paid momentarily
  •          To be held for a time
  •   Prepaid or unearned Tuition and Fees
  •          To be moved to Income as earned
  •   Installment payments on Land, Bldg, Equipment
  •           Usually on a monthly basis

     You MUST go "Beyond the Bank Balance" in order to have a complete picture of the financial situation in your Ministry.

#1 - Example

                        Bank Balance Only                                    $10,000
                        Restricted Donations
                                To be held for a time           $ 5,000  
                                To be paid momentary      $10,000  $15,000

    "Beyond the Bank Balance" info lets you know that the "Bank Balance" of $10,000 is obligated, but since you have $25,000 coming in soon you can cover all $15,000 of your Restricted Donation balances.  This "Accrued" info gives you a "Complete" view as to your real financial position.

#2 - Example

                        Bank Balance Only                                  $ 10,000
                        Money due you in 10 days                        25,000
                        (Less) Amount you owe others                (3,000)
                        Restricted Donations
                                To be held for a time         $ 5,000  
                                To be paid momentary      $10,000  $15,000


    Showing the "Money due you" and the "Amount you owe others" gives you an entirely different view as to your real financial position.


    Please thoroughly discuss and understand this "Beyond the Bank Balance" topic among yourselves and make sure you have complete financial information.

   This publication originated in December 1999 and was    UPTD: March 09, 2012