"JIMs JRNL" Edition
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TO: Interested Onliners
FROM:
Jim Bramer, Retired Auditor-CPA
RE: For the month of
August 2007
FILE: 0208-07/jrnl
Purpose of "JIMs JRNL": To assist your Ministry Finance Team be more effective plus help Christians control their spending
01 - The Ministry's "General Purpose Fund (GPFund)" is operating at a loss - how do we correct this?
Other indications that "there is a problem" might include the following:
1> The financial record keeping is not good. Financial information is not timely received nor is it understood by those who should know.
2> Staff members are not getting paid timely
3> The rent (or mortgage payment) is often late
4> Some of the unpaid bills are far too old
5> Ministry operations are sometimes being funded by sale of Ministry non-cash assets
6> General Purpose Fund Income is erraticWhat about this scenario: Per the finance report below, you will note that the General Purpose Fund (GPF) at your Ministry (or Church for that matter) is struggling and at Prior Year End there is $5,562 in the Bank and it is spoken for as follows: $1,450 is due creditors; $4,700 in approved Donor Designated Special Purpose Funds (SPFs); $5,774 in approved Board of Leadership Discretionary SPFs; and there was a ($6,362) deficit in the GPF as carried forward from the previous fiscal year. The Board of Leadership has obviously allowed the GPF to use portions of the the SPFs to cover this deficit.
QUESTION: After much prayer at a Church, other than help its constituents get involved in Righteous Personal Finance, what does the do under these circumstances and how does it continue to function?
ANSWER: As detailed when you Click Here it decides to no longer have any GPF deficits and control its spending by using the QBuxBox accounting system described at 0002. Or they do something like the following:A> The leadership decides which parts of the GPF operations (note this has nothing to do with the SPFs) has "Ministry Priority" and sets up a QBuxBox for each Priority area: Examples are: 01> Semi-Monthly Salaries/Benefits 02> Monthly Missions 03> Monthly Debt Service Payments and 04> AllElse Operations.
B> The weekly deposit that pertains to the GPF is placed, in priority order, within these 4 QBuxBoxes. NOTE: Some Ministries go out to their constituency and get generic GPF pledges -- but NOT by current year's 4 operational QBuxBox areas; the leadership decides was has priority, not the donor-constituent. However they often properly get pledges just to cover the deficit carried forward.
C> After the weekly amount needed for 1> is placed within that QBuxBox then the balance goes to 2>, and 3> etc. until the amount needed is reached. QBuxBox 4> receives the balance. If the amount needed does not come into the applicable QBuxBox, then the unpaid needed amount might be carried over until it is. For example, if the needed amount has not come in for the Sal/Benefits then the amount is paid from the available QBuxBox and such remainder is delayed until the following week, etc.
D> The Leaders receive a weekly report (see the sample report below showing both the status at the beginning of the year and after Four weeks into the new year) which clearly shows amount due vendors and which GPF QBuxBox belongs to the the GPF money in the Bank. Or, if there is money in any of the named 04 GPF QBuxBoxes then the Leadership can spend it --- no money then no can spend. There might be wisdom in leaving some residual like $200 in the 4> QBuxBox in case of some type of well defined operational emergency. Please note the status after Four Weeks; please especially note that the pledge receipts of $500 has reduced the Deficit that was carried forward.
QBs At Prior Year End After Four Weeks Acct Types Assets: Bank Checking - Savings $ 5,562 $ 1,739 Fixed Assets Land Bldg Equipment Total Assets $ 5,562 $ 1,739 Liabilities Acct Pay Payables $ 1,450 $ 575 Fund Balances - Net Assets SPFunds Equity Approved Donor Restrictions $ 700 $ 500 Equity Building Fund $ 4,000 $ 4,200 Equity Discretionary SetASide $ 5,774 $ 1,774 Total SPFunds $ 10,474 $ 6,474 GPFund Equity (Deficit) Carried Forward $ (6,362) $ (5,862) Equity 01-QBuxBox $ 62 Equity 02-QBuxBox $ 234 Equity 03-QBuxBox $ 56 Equity 04-QBuxbox $ 200 Total GPFund (deficit) $ (6,362) $(5,310) Total Liab & Fund Bal $ 5,562 $ 1,739
Contact us at Jim@bcidot.org if you need some help in getting some solutions or if you have any questions about the above system.
02 - Church Mission Trips and QuickBooks (QBs) Accounting
If your Church goes on Mission trips, you know there are some financial peculiarities that include those listed below:
INFO BY DONOR
>> Annual permanent giving record by Donors who are NOT to be integrated with the Church's DonaMail system, etc.
>> Provide a separate individual contribution receipt during the year for said donation; this is not done for the usual Church donation.
>> The total amount collected per activity by participant --- provides data so the participant can dialog with each of their donors, etc
>> The amount of non-cash payments via DonaMail congregants from Scrip and Scholarship sources so they can be reconciled to the regular QBs Company, etc.
>> Provide tax deductible information by applicable activity for placement within the DonaMail system -- that includes data used for DonaMail control and subsidiary account internal controls.
INFO BY ACTIVITY
>> Per the above DONOR list
>> Total Activity amount received that can be reconciled with regular set of QBs
>> The amount of non-cash payments from Scrip and Scholarship for reconcilement to the regular set of QBs, etc.
>> The activity may not jibe with the Church's normal fiscal year; or it may lap over two fiscal years, etc.
>> A variety of reports that must agree with the applicable accounts in the regular QBs Company, etc.
We trust that the following QBs satellite Company will respond to such matters: http://www.bcidot.org/qbb/0660-07.html
It happens doesn't it. In an undisciplined manner you as a Christian simply bought more stuff via your Credit Cards than what you could afford - or you did NOT have enough money in your Bank Account to pay off this balance. Not good -- you can NOT keep doing that !!!! So how do you prayerfully "right your ship"? May I suggest the following:
01> Agree with the Lord (I believe there is merit in placing such a pledge/agreement in writing) that you (and your spouse, as applicable) will NOT let this happen again. Or this is a spiritual issue where you need to keep your promise and place your trust in the Lord. Or you need to ask His direction so you can in the future function in a "Righteous Personal Finance" disciplined manner.
02> This means that fundamentally you need to know at least weekly if you have any money to spend or you need some type of "money record keeping" system so you know this before you do any of your buying.
03> This is possible when you embrace the two "Check Stubs" method that is set forth when you Click Here. Or your deposits are divided up into two pre-determined Spending Areas of your life. Or you maintain two "Check Stubs" .... one that you restrict for "Spoken For" activity and the other you use in a disciplined "Unspoken For" manner. You make buying decisions from available balances in either of these two "Check Stubs", but especially from the balance in the "Unspoken For" area.
04> You carefully keep track of your Credit Card charge slips and pay for them out of your Bank each week --- or you do NOT wait until the month end to pay for such purchases. Ideally, you have Internet 24/7 access to your Credit Card statement equivalent so that you can both monitor the Credit Card transactions and then weekly pay off the balance via the Online Payment method.
05> Of course, part of this "money record keeping" system will include money setaside in your "Spoken For" Check Stub area so you can ASAP pay off this old Credit Card debt.
04 - Thirteen most important Business Administration issues at a Church
Some time ago a well known Church Finance Consultant shared with me that, in this person's opinion, the following matters were the most important business administration issues that needed to be better addressed at a Church:
01. Lack of training and orientation of church board members and leaders.
02. Lack of Policies and Procedures.
03. Poor Financial Reports
04. Lack of controls on gifts and donations
05. Assets not properly accounted for, including computers
06. Lack of an internal audit committee and no annual audits
07. Personnel Issues
08. Poor reporting and a lack of understanding of 941, 1099 requirements.
09. Misunderstanding of employee verses contractor.
10. Misunderstanding of FLSA.
11. Tax Deductible Donations.
12. Poor records retention.
13. Untrained Church Business AdministratorsPlease contact me at Jim@bcidot.org for more details (6901-15) about each of these topics and just who this consultant is, etc.
05 – How Long do I keep these Financial Records?
-- every so often my dear wife says we need to clean house. Are you running out of storage space and you need to throw out some things. Hopefully, the information within the following link content will provide you with some guidelines along these lines at your Ministry:: http://www.bcidot.org/all/0082-01.htmlRight
06 - Please give A.L.I.C.E. honor and respect
This special lady ( A.L.I.C.E. = Assets; Liabilities; Income; Capital; Expense ) might help you to better understand the inter-relationships of debits/credits in giving effect to a variety of financial transactions. Her emphasize is "Double Entry" bookkeeping or accounting. Or this type of financial record keeping means that every transaction has two sides to it. For example, when you write a check, the money comes out of your Bank Account plus it is an Operating Expense or it is used to pay off some type of Obligation.
Please go to 0009 for more information about the A.L.I.C.E formula and how this important Lady serves us. Also be sure and digest the "Two Sides of the same Coin" content found at 0094.
FR: Onliner
I have noticed that you refer to "RIGHTEOUS PERSONAL FINANCE - RPFin"; Jim, please explain.
FR: Jim@bcidot.org
Yes, others have also wondered the same thing. I suppose I use the term "RIGHTEOUS PERSONAL FINANCE - RPFin" because it is a carry over of the title I have used when I have formally shared these issues in Seminars for BLVRs. I could just as easily used the term "Right-ful" rather than "Righteous." A more formal definition etc is found in 4007.
CHURCH FINANCE
All of us know that the Church entity itself should be a good steward of its financial resources. Such issues have been high profile in my vocational life. Much can be said about these matters, but the "RIGHTEOUS PERSONAL FINANCE - RPFin" issues, in my opinion, also needs attention.
In more recent years, I have become more convinced that the local Church needs to go beyond it's typical INTERNAL FINANCE matters emphasis and help their members on this subject of "RPFin". The Board of Leadership of the local Church needs to not only manage carefully it's own INTERNAL FINANCIAL matters, but provide help to their members (or constituency) on this topic.
It is a well known fact that various Para church groups have recognized that Church members need help in the RPFin area of their lives and have stepped into the gap. Three groups stand out in my mind, the Ministries headed up by RON BLUE and LARRY BURKETT plus an organization known as CROWN MINISTRIES.
With regard to finances in a church setting, we often find something like the following:
- The Pastor preaches, no more than two or three times, if at all, during the year on the general topic of biblical principles regarding this subject.
- A Board of Leadership Finance Group functions with an emphasis toward such things as the Church's Operating Budget and protection of the funds and financial resources of the church.
- In a few churches, a Stewardship Group functions toward encouraging the membership to know and live up to their church financial commitments.
- During, and at the end of the year, INTERNAL FINANCE matters are reported, yea, even highlighted, because there never seems to be enough.
-- LOCAL "RIGHTEOUS PERSONAL FINANCE-RPFin" HELP --
My thesis is that each Church's Board of Leadership should expand its Church Finance responsibilities. It should cover not only its INTERNAL FINANCE affairs, but provide specific RPFin helps to its membership. This might include ....
1> We should all be convinced that there is nothing wrong with publicly 'talking about money' within our Church, it is another one of those 'things' in our every day life that should be a 'tool (blessing) and not a tyrant (curse).'
2> RPFin principles need to be taught to our children at a early age. It should be appropriately integrated into our CHRISTIAN EDUCATION endeavors.
3> New BLVRs should be so educated; appropriate pre-marital RPFin training should be provided; newly marrieds should be helped to lay appropriate RPFin foundations.
4> Like a lot of things in our Christian life, Our older marrieds should be encouraged to share their experiences along these lines with the younger generation.
5> As 'pushed' above, it is my opinion that the local Church Board of Leadership should be responsible to see that it's constituent's experience RPFin. Then it should avail itself of the resources provided by CROWN MINISTRIES and others. Go to 4999 for a list. Like in the case of many other fine para-church groups, it is in my opinion, that such a group should NOT assume governing issues regarding its people that properly belong to the Church's Board of Leadership.
6> The local Church's thrust along these lines MUST include early detection and prevention of it's constituent's RPFin problems. Please go to 4001 for a self-examination tool.
7> Many Church members have a personal computer. Once a member knows and practices such Biblical principles, they should be encouraged to use applicable Personal Finance software in keeping financial records that help them experience RPFin.FR: Onliner
I think I understand now 'where you are coming from,' Jim, but just exactly how do you help in this regard?
FR: Jim
Well, hopefully, I can convince Churches that their Board of Leadership, via the respective Committee, should cover these additional responsibilities, as explained above.
An essential part of the BLVR experiencing quality RPFin is good financial record keeping. A way of doing this is via use of personal software and a Quite Virtual Envelope (QVE) system. Also check out the Budget Box system and the resources found when you Click Here.FR: Onliner
Thank you, Jim ...... we will be in touch, I am sure, as our present Board of Leadership and the Finance Group certainly does not now address these issues.
Church Administration Resources Church Treasurers Role Click and Pledge Online System Deferred Gift Annuities Investments by Christians Manage Risks so as to protect Church Finances Online Security Payschools Cyber Space and Tithing
This Month's Editorial - "For What It is Worth" originally render in August 2007:
Current "Ministry Finance" Truism
All too often a Ministry has the same Constituent data/info in multiple places -- or two or more computer databases or sets of records. So when you add or update such info, you have to update it in all places. As explained with 0021, please strive to have constituent data/info and donation/giving records in a single place.
Prayerful Thots :
Dear Lord: Two issues concern me this month: 1> That I would be attuned to be appropriately helping fellow local Christians in their pursuit of Righteous Personal Finance. and 2> That you readers of JIMs JRNL will benefit from an alphabetical topical listing of all of the 2007 editions when you Go Here 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" info contained herein come from www.bcidot.org or www.qbuxbox.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 “Links that are "NOT" via Jim Bramer” above do NOT necessarily imply my endorsement. Further, if any link herein does not work, let me know which one at Jim@bcidot.org. Lists of our www.bcidot.org articles (or Web Docs) during 2005, 2006 and 2007 can be found at 9705, 9706 and 9707
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 QBs = Quickbooks; RPFin = Righteous Personal Finance , SPFunds or SPFs = Special Purpose Funds
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