"EDITED ONLINER DIALOGS"
TOPIC: Purchase Order (P.O.) Alternative ORIGINATED August 3, 2003
TOPICAL OVERVIEW: Some more information about buying at a Church or Ministry via Plastic or Credit Cards as a preferred alternative to the use of getting primarily Volunteers to use Purchase Orders (P.O.s) before they do any buying, etc..
FILE: 2039-077 UPTD: March 09, 2012
TO: Bcidot.org: We are considering the possibility of beginning to use purchase orders (P.O.s) for making ministry supply purchases. We have never used them here and I am not too familiar with how to use them in a church setting. If anyone has a form you use that you would be willing to share, I would be appreciative. Also, if you would be willing to share the process for how they are used in your church, I would be grateful to receive that info as well.TO Onliner:TO: Bcidot.org:
The purpose of P.O.s, of course, is primarily to pre-authorize or control spending. Use of P.O.s in a Church setting where volunteers are so active can be awkward. You might consider controlling spending per the method suggested when you go to 0114. Please also go to the following web pages for relevant info: 0013 5014 0041. Also Click Here for more information about the Debit Card options also.
Thank you -- I have read your 0114 link above, but using credit cards is actually part of my dilemma. Here�s what I am trying to deal with. We have church members who have been authorized to go out and buy supplies for a ministry. We have staff members who have been giving them the church credit card, which has the staff person�s name and church name imprinted on it, to make the purchase. The member was then signing the staff person�s name on the purchase slip. Since the charge card company does not authorize anyone to use the card except the cardholder, I told the staff members that they could no longer give the church card to a member to make purchases. I was then told that we needed to have a petty cash account of several hundred dollars so that we could make immediate reimbursement to members who make a purchase using their own funds. I stated that I would not consent to keeping a petty cash fund with that sum of money in order to make reimbursements that could sometimes be a hundred dollars or more. I stated that the best process would be for the member to make the purchase with their own funds and we could reimburse by check within a couple of days at the most. I was informed by a staff person that it is not right to make a member use their own funds for making ministry purchases, regardless of how soon reimbursement could be made. So my dilemma is trying to determine how to accommodate members who make purchases for the church while also maintaining some level of financial accountability and responsibility. This is why I thought the use of purchase orders may be part of a solution because a member could then go to a business (provided they will accept a purchase order) and make the purchase without having to pay from their personal funds. Frankly, I don�t quite know where to go with this situation. If you have any thoughts, I would be very happy to have you share them with me.TO Onliner:
Thank you for getting back to us -- I trust you find the following scenarios responsive to the situations you describe.PLEASE NOTE: The Authorized Buyer in the scenarios below is either a Church Staff Member or the �in charge� Volunteer who makes purchases within Budget constraints: Generally speaking, no one (Staff Member or Volunteer) is encouraged to spend their own money � but if they do, see SCENARIO #2 below.POSSIBLE SCENARIO #1
The Authorized Buyer gets a weekly �Actual to Budget� report from the Church Bookkeeper so this Authorized Person knows if there is money budgeted for said purpose. Let's say that there is money in the budget, so the Authorized Buyer goes to the Bible/Book Store (or other applicable store) and charges their purchase to the Church�s �pay monthly charge account� at that store. Then the Authorized Buyer provides appropriate documentation to the Church bookkeeper so this purchase is included in the next �Actual to Budget� report. Authorized Buyer does this throughout the month at some 4 retail stores that allow authorized church charges during the month. Bookkeeper timely pays each of the four retail stores via their reconciled monthly statement
POSSIBLE SCENARIO #2
The party is a volunteer who gets verbal approval from the Authorized Buyer to make a purchase from their own resources (cash or credit card) up to $80.00. PLEASE NOTE --- this is Authorized Buyer�s decision, not the Volunteer's decision. This is the amount for such transactions per the Church�s Finance Policy. See sample at 5005. This transaction is approved by the Authorized Buyer who processes a check request (with related documentation) so that the Church Bookkeeper routinely reimburses the volunteer. Of course, this transaction is reflected in the next �Actual to Budget� report. Approved petty cash transactions also flow through this means. Usually a Petty Cash purchase is for some $10.00 or less.
POSSIBLE SCENARIO #3
A Volunteer needs to buy something --- so this person goes to the Authorized Buyer who determines from the �Actual to Budget" report that this is OK. Most Authorized Buyers have a Corporate Credit Card (like VISA or Master Card) that includes their name. The Authorized Buyer fills out and signs the appropriate "Credit Card identity Form" that the Volunteer can provide the Vendor as it includes the statement that it is OK to use my corporate Credit Card to make this purchase, etc -- let me know if you would like an example of this Form. The Volunteer takes the Form and the Credit Card to the Vendor and makes the purchase. Volunteer returns the Plastic and the purchase docs to the Authorized Buyer who OKs it and processes it on to the Bookkeeper for applicable �Actual to Budget� reporting.. Like in the above Scenario, this happens at 4 different retail stores. The Bookkeeper reconciles and timely pays the Credit Card monthly statements -- plse note the need to write only one check for all of these purchases from the 4 different stores.I trust this is not an over simplification of a P.O. system alternative usable at most Churches. Let me know.
As most of you know, at www.bcidot.org dialog by email with Onliners regarding Ministry Finance (MinFin) matters. Above are what we call "Edited Onliner Dialogs", or edited versions of actual dialogs with some of you; but we have honored your privacy and not used your name or that of your Ministry. Our purpose is to make topical MinFin information available to any interested Ministry Finance Team so we all can learn from these perspectives. Thanx - Jim Bramer, Retired CPA-Auditor - Proverbs 9:10
ABOUT US | OUR PURPOSE | SITEMAP | COMPUTER FUND ACCTG | HELPS | HOME - Contact: Jim@bcidot.org