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                            TO:  Interested Ministries                                                                                                            FROM: Jim Bramer, Retired Auditor-CPA     
                                                                                                                                                                                       FILE: 0114-02/all

                            RE:  Plastic Buying - with an  eCHECK  thrust                                                                       Originated in August 2011                                                       

      Below is a transcript of another hypothetical Online conversation, or THRD, between   Jim@bcidot.org  and members of a M)inistry F)inance T)eam - MFTeam: the MFTeam members are:   ... PAT (Ministry Executive), LEE (Volunteer Board Treasurer), and FRAN (Ministry Computer Bookkeeper).  

FR:  Jim@bcidot.org 

        One of your financial stewardship objectives is to provide complete and up-to-date financial information to those who should know.   This includes the reflection of all expenditures incurred (Accrual Basis of Accounting) as of a certain point in time even though the payments have not yet passed through the Bank.  Be sure and read ' Beyond the Bank Balance'    

       To facilitate all of this, we strongly recommend that your people  purchase ALL items via the  eCHECK  process whereby paper-less checks flow at the time of your purchase.   Almost all vendors these days (including the US Post Office) allow you to purchase via Plastic; or you no longer allow staff/volunteers to charge things to a Vendor's Payable account at such local places as: Hardware Store; Christian Book Store; Stationery stores, etc.   Please use the Credit Card purchase process only if the vendor does not permit the  eCHECK  process and then, of course,  you pay off the Credit Card Balance weekly.   

       REMINDER:   A major aspect of all of this is to control spending and NOT MAKE PURCHASING CONVENIENT.  Ask us about the means to inform the individual merchant that it is OK for a volunteer to use a staff member's Plastic.  

        Please also note the buying issues addressed within the WebBOOK when you  GO HERE   about the topic of " Do we "really"  have money to spend."   You also might find of interest this   eFinFax   article and  others when you  Click Here  and  Here. 

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         WATCH THE PRACTICE OF STAFF MEMBERS/VOLUNTEERS BUYING WITH THEIR OWN CASH OR CREDIT AND THEN SEEKING REIMBURSEMENT FROM MINISTRY;   HAVE CAREFUL FINANCIAL POLICIES and or PRACTICES  WITH REGARD TO THIS.

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    Appropriately also place remote orders via the eCHECK  process. By the way, did you read the cartoon whereby Johnny was asked by his Teacher if he could tell the teacher what is a Plastic Surgeon.  Johnny said he was a "Surgeon who takes Credit Cards."

    Staff members/volunteers "MUST" give Plastic purchase documents/slips to the Bookkeeper.

   We also recommend that Utilities and Phone bills (as well as other repetitive operational expenses) be paid automatically via the electronically Online Bill Payment system at the chosen time of the month.

    In general, we recommend that you do NOT use your software's Vendors Payable system.  

   The Ministry's Plastic can be given by a Ministry Buyer to an authorized volunteer buyer (be sure they have all of the necessary codes, etc.) as they do the buying via the the eCHECK  process.   Be sure they return the charge slip and the Plastic (often the next Sunday, etc. in a Church setting). .

          FR: PAT

    What about the use of Purchase Orders, P.O.?  Seems this is common process that we should consider.

Fr: JIM

    Yes, P. O. s are often used in this scenario. But we believe that effective control of the Ministry's Plastic can accomplish the same thing ..... namely, pre-approval of purchases.  When you have buying done by both staff and volunteers it is a "process extra awful"  to get them all to comply with the necessary P.O. protocol.  Since the staffer or volunteer (this is a specially sensitive area within Churches and other Ministries) has to obtain the Ministry's Plastic from the authorizing person in order to buy said approved item, we believe a Ministry is accomplishing to same thing, but in a slightly different manner.  Please Click Here  and  Here  for some more info along these lines.

   Sometimes the Volunteer buys things using their own resources and wants to make this a donation.  Such transactions need to flow through the books for two reasons:
        1> The leadership needs to know what the activity really costs 
        2> The donor needs a donations receipt. 
    Ask us about the need for a special check request form as the Ministry writes a check to itself and this check is made payable to the Ministry and is then processed along with all of the other Donations as a credit to the Volunteer/Donor, etc.  Please note that some Finance Policies  state that a volunteer is limited to $100.00 only of buying and then seeking reimbursement.

FR: PAT

    OK,  but I do not feel comfortable getting into a PLASTIC scenario; somehow it does not ring true to me. Plus our Ministry is kinda  'out in the country' and it would place an extra burden on volunteers to ensure return of the PLASTIC and receipt.

FR: JIM

    I find your response interesting, Pat. I know that there are Credit Card abuses and concerns 'out there', but, like a lot of resources in life, there should be the "USE" emphasis and not the "MIS-USE".   Plastic use should be a controlled TOOL and not an uncontrolled TYRANT.  The debt issue at the Church is resolved by then paying off the Credit Card balance weekly.  Control of purchases is the major theme here and not necessarily how it is done.   Seems that a Ministry's location, or maybe logistics, is a minor issue. The major issue is Financial internal control as a Ministry volunteer appropriately provides documentation (receipt, in this case) and returns the Plastic.

     Please fill me in a little more from your perspective on this  ...  I need to know a little more as to "where you are coming from", Pat. 

FR: PAT

    OK,  I can see your point, Jim. Maybe I am overreacting from the general people mis-use of Plastic that we hear so much about.  Thank you for mentioning that the Church is to pay off it's Credit Card balance weekly,  or more frequently than at month end.

    Let me review this more with our folk here..... I will get back to you if we have questions.

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 This was updated last on August 17, 2011  Click here   and go to List of threads (THRDs) at www.bcidot.org

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