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To: Interested
Onliners
FROM:
Jim Bramer, Retired
Auditor-CPA
RE: J I Ms
J R N L for the month of February 2008
FILE:
0202-08/jrnl
(1) HOMERS who serve remotely (01)
Do you know of a Mom at Home or a Retired KeenAger ( HOMERS, if you please) , with a Bookkeeping or Accounting background, who would like to primarily serve Small Ministries in such a capacity with an Internet emphasis? If so, then please have them first read this LINK CONTENT. Then let us know at Brad@rpfin.org or JIm@bcidot.org and we will follow up from there. Resources of this nature are such a blessing -- especially within context of the new endeavor known as Brads Nest of Bees that is aimed primarily at assisting New Christ-Centered Ministries, or any small Ministry that handles less than $500,000 per annum.
(2) Physical & Dollar Accountability of Church Equipment (04)
The following is a result of pursuing this topic recently at a larger Church. I trust you find it of value..
Some 10 yrs ago you needed to reflect on your books the total amount that you believed that the Church had invested in Equipment up to that point in time. You needed to do this for "Land, Building & Equipment (LB&E)" financial statement reporting purposes and to meet the annual depreciation (group/block method; not by individual item) GAAP requirements. So you 'guess-timated" a certain amount --- lets say $50,000 ---- and you placed it within the overall LB&E accounting records. Every year after that, as part of your fiscal year end finalization effort, you took Equipment purchase information from your GPFund and SPFund records and added it to your LB&E accounting records, or you capitalized Equipment that cost $500 or more during the past number of years. This overall process is generally within context of the link contents found when you Click Here, Here and Here.
But to have a complete "Physical and Dollar Accountability" of your Church Equipment, you fundamentally need to have a "subsidiary" listing by piece of equipment that totals the dollars appearing in the Equipment portion of you LB&E records --- which, let's suppose, was $100,000 as of 12-31-X7. Like at many Churches, you really need to address these "Physical and Dollar Accountability" issues. To care for this important matter, please consider taking the steps that follow:a> You take a physical inventory and place a permanent label on each piece of Equipment. This label could include at least:
--- Staff person (or department) responsible for that piece of Equipment
--- Usual location at the Church
--- When it was acquired
--- Some unique ID numbers/codes (that might cover the preceding issues) and if known
--- The dollar cost
b> If possible, you locate the original purchase price of each item. If you can not resurrect the original cost then you assign what you believe to be the cost equivalent. Some that show up in the physical inventory were not capitalized because the price was less than $500.00. So you simply assign $1.00 to each of these items within the Excel spreadsheet mentioned below so that it is listed and you can take an inventory as you care for the needed "physical" accountability matters, etc.
c> You now have the data for an Excel spreadsheet that would now include the above label data and would ultimately have a "subsidiary" listing of the total dollars invested in your Equipment.
d> Let's suppose that this "subsidiary" listing via this Excel spreadsheet that follows this effort totals $90,000. You then make a one-time adjustment of your $100,000 Equipment total that now appears at 12-31-X7 in your "Land, Building & Equipment-LB&E" accounting system. In the future the Control account (Equipment Total - which is part of the LB&E accounting system) and the subsidiary (Total dollars via the Excel spreadsheet) MUST always be the same. Of course, you continue to do your annual block deprecation effort but you use the revised $90,000.
e> In your Financial Policies manual you establish how often this is to be done (preferably annually during a slower time of year) and make sure it gets on the applicable staff member's task todo list, etc. You arrange it so that the department responsible for the inventory can easily get a list via the "subsidiary" Excel spreadsheet document..It seems that some ideal features of this process could include:
1> The label process takes place during the year at the time of acquisition of the Equipment.
2> You take a pix (digital cameras of today are so straight-forward) of each that includes the label contents
3> You make full use of "bar code" resources where you ultimately post the label info to the Excel spreadsheet
(3) The FinFax Accounting System (03)
. The thrust of the FinFax Accounting System is to convey, to all who should know, the full and "complete" information as to a Ministry's financial status and activities --- or what your Bank Balance is after all known purchases or activities. All too often Bank Balances only provide "incomplete" information, because there has been some expenditures that have not yet entered the accounting system and therefore does NOT provide us with the needed "complete" information.
Financial terms that apply to such activities are the "incomplete" Cash Basis and the "complete" Accrual Basis of accounting. This FinFax System primarily involves the following: 01> Your buy everything possible via the use of Credit or Debit Cards ; 02> You weekly pay off the Credit Card account balances; and 03> you pay all other known expenditures on a weekly basis. By doing all of this you have before you, on a weekly basis, the essential "complete" Accrual Basis financial information, yea, financial facts . Please Click Here for more details about all of this.
(4) Integrated Donation Accounting (02)
I am disappointed to inform readers of JIMs JRNL that I am discovering more and more attempts to integrate computerized "Donation Accounting" and computerized "Ministry Fund Accounting" record keeping into the same system --- especially when a Ministry uses QuickBooks (QBs). By "Donation Accounting" I mean annual calendar year financial giving record information by Giving Unit that minimally meets the IRS reporting requirements, etc.
Churches and other Ministries MUST keep constituency records (preferably via their own personalized Computer System) that enables them to minimally know snail/email information. Having such relevant data of your people, or people groups, is essential to meaningfully ministry. When you maintain such information in two sets of records, you need to insure that both records are the same --- or you have to enter the same basic data twice.
As explained in detail when you Click Here and Here , I maintain that such computerized records should NOT be integrated -- plus I provide you with some links to sources in doing this computerized record keeping, etc. You should maintain only one up to date constituency file (note I reference this as a "DonaMail" system) that particularly includes Donation record keeping by Giving Unit. When you establish, or update such a "DonaMail" system. the Ministry has to do this only once, etc.
Further, I maintain that it is not necessary to electronically transfer deposit information to the Ministry Fund Accounting system (like QBs). Remember, this accounting system is only interested in the total deposit to the Bank and which Fund totals are involved --- not the details. Let's say that the weekly deposit was $1,000 and $650 went to the GPFund and the remaining balance went to 3 different SPFunds. Getting this info into the Ministry Fund Accounting system manually takes a minute or so --- especially when you use a memorized feature like what QBs provides.
(5) Ministry Business and/or Finance Job Descriptions (05)
As to Ministry Business and/or Finance Job Descriptions, I have approached such issues a little differently --- or when you Click Here you will notice that I attempt to present an overview of all such tasks and then you assign them to the responsible party. The idea is for you to personalize such matters for your unique Ministry and in doing so you are sure that all tasks are appropriately covered and assigned, etc.
(6) Non Calendar Fiscal Year End (06)
We strongly believe that most all Ministries should NOT have a fiscal year that ends on 12-31-xx, or have a Calendar Year End. The Staff of a Ministry is "very" busy during the months of December and January --- many Ministries derive a large portion of their Donations during December. Holidays, plus calendar year payroll tax accounting, add to the 'hub-bub" -- so why add more with having a Ministry year end also.
But most importantly, one of the fiscal and operational year end objectives is to "look back and then plan forward" so you can put dollars to your future annual plans .... this could be very hard to do during these months. Please consider Spring year ends for Churches; summer time year ends for Schools and early Fall year ends for other Ministries. The scope of calendar year end tasks as outlined within the following Edited Onliner Dialog (EOD) might be of interest:From Onliner:
I have this past calendar year been using the Ministry Finance infra-structure and our QuickBooks (QBs) Chart of Accounts that you helped us put together. Our fiscal year ends 12-31-xx. Please provide me with some help with the fiscal year end things that I have never done before.
From Jim@bcidot.org:
Thanx for asking . Please remember, of course, to do the appropriate filing so that people get their W-2s and 1099s for the calendar year. You will also remember that , in/around the calendar year, Clergy Housing matters need to be re-authorized. Plus, of course, you will need to provide people with a report of their donations made during the past calendar year. Reminder: Please remove (maybe replace) any old outstanding checks as part of your Bank Reconciliation process. Of course, in around this time of year you have to cope with your entire General Fund fiscal year budget issues of the upcoming new year. Please also consider the following:>> "EOY -End of Year " and "EOP - End of Period" dates, I hope the content of this link is helpful: http://www.bcidot.org/jrnl/0210-07.html#8
>> "Straddling Fiscal Year matters", ask us about this.
>> Accounting for Special Purpose Fund year end balance forwards, please go to this link: http://www.bcidot.org/qbb/0659-02.html
>> If you have more than one QBs Company, please go to this link: http://www.bcidot.org/qbb/0611-19.html
>> Other Onliner discussions that might be of help - please go to the list via this link: http://www.bcidot.org/EOD/qbooks/index.html
>> "Setting things in concrete" as discussed within the content of this link: http://www.bcidot.org/qbb/0645-02.htmlWithin the past few years there was a "when does your Church Fiscal Year End' poll out on one of the Internet Church Forums. Among 50 responders, over half still have a December 31st fiscal year end. Isn't this interesting in light of what I set forth above. Here are the details: Jan, Feb or Mar (3); Apr, May or June (13); Jul, Aug or Sep (6); Oct or Nov (1) and December ( 27)
(7) "Why" you have Money is far more important than "Where" it is (07)
Too many of us (Ministries and Individuals) inappropriately manage our finances (I am talking about Individuals as well as Ministries) almost exclusively form Bank Balance information - be it a general Checking account plus maybe a Savings account for specific purposes. Please note the reasons when you go Here for having a "pooled" Bank Balances overall approach, where you earn as much Interest Income as possible, and you do NOT establish a Saving account for certain money you set a side. etc.
In other-words, when you rely on Bank Balance information only, you are managing your finances on "incomplete" "Where is your Money" financial information. For prudent management of your finances, you urgently need to not only know "Where is the Money", but you also must know "Why you have Money" as it is essential in order to have "complete" financial information. You need to maintain sufficient financial records so you know what righteous constraints (self determined budget if you please) there is on the money you have on deposit. You need to know for day-to-day operational purposes to what extent you have prudently restricted its use. Hopefully, you have determined that other entities are entitled to some of this money on deposit. Therefore you personally (plus any Ministry, of course) need to at least:1> Judiciously determine in advance your restricted day-to-day spending categories; then
2> Conclude before you make a deposit just how you plan to spend it; then
3> Do the essential record keeping, and reporting, so that you also have current '"Why you have this Money" on hand - or how much is available to spend in that particular area or category, etc.
4> Regular reports (preferably weekly) enable you to appropriately spend within your self defined restrictions, etc.Let's suppose that you as an individual have $3,862 in the Banks ($3,047 in Checking and $815 in Savings ). The $815 in Savings was set a side (Escrowed -- if you please) for your personal future events and/or reserves, etc. You owe $1,541 to the Credit Card Company (Be sure you understand the merits of paying this off weekly); you also have not yet paid your Church tithe of $300 -- plus a Mortgage payment due momentarily of $985. These commitments total $2,826 and when we subtract this from your Checking Account balance of $3, 047 it leaves only $221. Or you might have $3,047 in the Bank but you really only have $221 to spend for disciplined uncommitted purposes, etc.
You must know "Where" your money is ($3,862), since it is an essential part of the equation, but it only provides you with "incomplete" financial information. You must also know the other essential part of the equation, or "Why" you have this money" --- like the above commitments of $2,826. Only then will you have "complete" and overall essential financial information so you can make righteous and prudent future buying decisions. Information found Here about "Two sides of the same coin" might also be of interest to you. THRUST -- Please do your very best to have and effectively use the complete financial information discussed here as you righteously manage your money as unto the Lord. Please Click Here and learn about "SPENDING CONTROL" resources, etc.TRUISM -- All Christian entities (Ministries and Individuals) must handle money - it is an essential part of our lives here on this earth. When it comes to stewardship of physical resources --- and money seems to have the highest profile, We hope that you make the righteous use of Banks and Credit/Debit Card Companies since you then optimize security plus you have a written record of money both coming in and going out when you use as little "green stuff" as possible.
Click below for Potentially Helpful Online Links for JIMs JRNL Readers
Church Management Software Review ECCU - Finance Reporting ECCU - Treasurer Issues Remote Payroll Services IRS Non Profit Commissioner Remarks Christian Computer Magazine
Monthly Editorial - "For What It is Worth" as originally rendered in March 2002: Ministry Finance Integrity Pledge
Current "Ministry Finance" Truism
Below is one of my Ministry Finance precepts/beliefs/principles, or "rules of thumb". Please go to 0069 for a complete TRUISMS list
DEBRIEFING - written minutes following Ministry Finance meetings are essential, but your individual subjective written thought gathering (debriefing, if you please) captured right after any meeting from your perspective is very very valuable.
Lord ---- In reviewing my files I came across this 0034 link content about suggestions about "daily prayer" for fellow "Ministry Finance" members. I trust, Lord, that readers will periodically take this type of action in their particular setting. Thank you, Lord, for your Magnificent Grace. In thy Precious Name, Amen.
This "Blogger" like monthly endeavor (99) allows me to share some personal comments/thoughts as to Ministry Finance issues plus matters concerning Righteous Personal Finance for Christian people. Please go to 0200 for further explanation and links to earlier JIM's JRNLs. The four digit links xxxx and some "Click Here" herein come from www.bcidot.org sources.
If you would like to receive the next monthly JIM's JRNL during the first week of the subsequent month, please join the following Yahoo Group: ---- http://groups.yahoo.com/group/JIMsJRNL/. Caution --- the non www.bcidot.org web links that I reference herein do NOT necessarily imply my endorsement. Further, if any of these links do not work, let us know which one at Jim@bcidot.org. Lists of our www.bcidot.org articles (or Web Docs), can be found at 9706 9707 and 9708
Probable "Ministry Finance Lingo", or "Frequently Used Vocational Terms" used herein, appear below:
BLVR = Someone who has accepted Jesus Christ as Lord and Savior, CBA = Church Business Administrator, CBAer; CMS = Church Management Software/System; CPA = Certified Public Accountant; GAAP = Generally Accepted Accounting Principles/Practices; GPFund or GPF = General Purpose Fund; MFTeam or MFT= Ministry Finance Team; QBOE = QuickBooks Online Edition; QBooks or QB = Quickbooks; RPFin = Righteous Personal Finance , SPFunds or SPFs = Special Purpose Funds
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This document was updated last on: July 05, 2008
