Accounting Options at a Church 5010-02 ZZchu

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                           TO:  Interested Churches                                                                 FROM: Jim Bramer, Retired CPA-Auditor
                                                                                                                                            FILE: 5010-02/Chu 

                            RE:  Church Accounting Options                                                   UPTD: April 24, 2010


    Below is a hypothetical Online Email thread between any one of the following MFTeam members:  PAT (Ministry Chief Executive), LEE: (Ministry Volunteer Treasurer), or FRAN: (Ministry Computer Bookkeeper) and  Jim@bcidot.org   Click here and go to List of threads (THRDs) at www.bcidot.org


FR: LEE -

        You will remember, Jim,  that I have been using my computer at home to keep the Church's books. The Church continues to grow, but I simply can NOT continue keeping the books at this point in my family and vocational life; these duties need to be assumed by others.
        Our Ministry Finance Team needs some help as to how this might be done ... please share some of the options with Pastor Pat and I.
        Oh, to remind you, we are convinced that our Church should gain the benefits of a relevant computer finance system (s).

FR:  Jim@bcidot.org  

        Good to hear from you, Lee!  So very pleased to learn that the Church is growing ... it sounds like you have the right kind of problems.  I agree that you should benefit by the available finance computer systems!

-- BOARD TREASURER #1 --

            Yes, like many small churches the Board Treasurer #1 is what I call the FUND BALANCE ACCOUNTANT. This person does at least the following:

  •   Records the deposits;
  •   Writes checks and records bills when paid;
  •   Makes budget entries;
  •   Does the monthly bank reconciliation;
  •   Sees to the proper transaction coding;
  •   Handles the Church's payroll tax filings;  and provides the MFTeam with weekly and monthly financial statements.

        In general, this person is a 'financial transaction processor' so that the MFTeam can make informed financial decisions.

-- BOARD TREASURER #2 --

        When possible, the Board Treasurer #2 should delegate most of these tasks to someone else; thereby allowing this person to concentrate on giving more leadership to the MFTeam. Such Board Treasurer #2 should then be able to interpret financial history for its impact in the future; also see the bigger picture and focus in on major issues.

FR: LEE

        Yes, it sounds like we are at the above point in our Ministry. Please explain why you use the title FUND BALANCE ACCOUNTANT when you refer to the Bookkeeper?

FR: JIM

        Oh, it's just another one of my attempts to emphasize the Fund Balance accounting and resultant financial reporting at a Church. It's an attempt to restate how this person records the flow and status of a Church's numerous Special Purpose Funds (SPFunds), as well as the activity within a General Purpose Fund (GPFund).  Please reference 0041 as to Ministry Fund Accounting.

FR: LEE

        So, from your perspective, what options do we have?

FR: JIM

        In our opinion, smaller churches have at least the following options along these lines:

VIA  VOLUNTEERS

DONATION TRACKING

        A volunteer uses either their (See 0092 as to a potential tax deduction) Home Computer or the Church computer system to update these weekly records; they then provide the FUND BALANCE ACCOUNTANT with info as to which funds belong to the weekly deposit. Plus, of course, this person provides the membership with at least annual giving reports each January. Church Management Software/Systems, or  DONAMAIL (Donation and Mailing computer systems) programs nicely combine these connected record keeping needs.

          FUND  BALANCE  ACCOUNTANT

        One volunteer uses either their personal computer (See 0092) or the Church computer system to meet these needs .... see more task detail above. Weekly deposit info comes from the above DonaMail system and amounts due to Vendors or Employees are written from requests by appropriate MFTeam officials. Weekly and monthly financial reports come from this source. .

Via  OUTSOURCE (Sub-Contracting)

        Some of the above FUND BALANCE ACCOUNTANT responsibilities are given to an outside Accountant, or Bookkeeper. We CPAs call this a "Write-Up" assignment. Logistics, or getting information from one place to another and back, is always an important part of such an equation. From my perspective, it is highly desirable to be able to Email files and/or financial reports back and forth between the FUND BALANCE ACCOUNTANT and the applicable MFTeam officials. Please Click Here and see some resources for those of us that are comfortable using the Internet for Finance Mgt.   Please go to  5888,  read this material carefully, and contact me at  Jim@bcidot.org  if you think this Internet System is preferable to the info above.

Via  CHURCH STAFF

            At the appropriate time, the above processes are handled by Church staff using the Church's Computer system on the Church premises.

Via the MFTEAM 

            Of course, all of this is under the direction of the Smaller Church's MFTeam; consisting of at least the Church Volunteer Board Treasurer, the Counting Team Captain; when applicable, the volunteer FUND BALANCE ACCOUNTANT, and sometimes the Pastor. This group usually replaces the formal BOARD FINANCE COMMITTEE as it functions as a LEADERSHIP BOARD sub-committee.

FR: LEE

        Can you serve in any of the above capacities, Jim?

FR: JIM

        Yes, but on a interim basis and with a "help your person to get going thrust". Please note the CHURCH REQUIREMENTS below.

> You must have access to a Computer using Windows and have access to the Internet.
> Your Computer system must be able to use the Windows software known as
QuickBooks (TM) (QB).
> You must be Online Email and attachment literate.
> You must maintain the QB's check stub equivalent.
> You must maintain the DonaMail system and provide weekly Fund deposit info for QB system.
> You must maintain the unpaid and paid bill files.
> You must write checks and make such coded QB Check stub entries.
 > You must determine withheld payroll taxes and process the paychecks ... including their coded entry within the QB check stub.
> There must be an agreement as to who is responsible for filing quarterly payroll tax returns, paying payroll taxes and settling up at the end of the calendar year.
> All monthly bank statements are processed directly to us so we can do the bank reconciliation.
> You must send the QB file to us monthly.

Please also review the following : 0100   0098    0099

FR: LEE

        OK ... I see that we need to look at our resources and make some decisions here at our end. I certainly understand why it is MUCH more ideal to be able to care for such items locally.
        As a Ministry Finance Team, we likely will soon be setting up a conference phone call with you.

        


  Please Click here for list of Church resources here on www.bcidot.org. The bulk of this Publication originated on January 1997 and was  UPTD: April 24, 2010

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