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                  TO:  Interested Onliners or Ministries                                                                                 FROM:  Jim Bramer, Retired CPA-Auditor
                                                                                                                                                                        FILE:  0208-03/jrnl
                        
                   RE: 
J I Ms  J R N L  for the month of August 2003                                                         Originated:  August, 2003  

PURPOSE:  To help your  Ministry Finance Team  be more effective:


     This process allows me to share some rather personal comments/thoughts (and sometimes written Prayers)  about Ministry Finance issues during this month.  Please go to  0200  for further explanation and links to earlier JIM's JRNLs.  The four digit links  xxxx  below come from www.bcidot.org .  See list of Frequently Used Vocational Terms at the bottom of this document.  If you would like to receive the next current  JIM's JRNL  during the first week of the next 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 in these JIMs JRNLs; do NOT imply my endorsement per se.  Further, if any of the links below do not work, let us know which one at LINK@bcidot.org.  Incidentally,  our more recent www.bcidot.org  Web Docs, or writings, can be found at 9712.   


Debit Cards (3)

        How many times have you handed your VISA card (or such a generic Plastic Card) to a retail clerk and they ask you:  "Do you want to use this as a Credit Card or as a Debit Card  (some even say "do you want to use it as an ATM Card,"  etc) ?  We soon learn that if we use the Debit Card option,  the amount of the purchase immediately reduces our Bank Account balance.  As you know, if we choose the Credit Card option we are permitted to charge it and then monthly pay all of the such charges at once.  But the related issue is that too many Ministries do not pay off the Credit Card balance and accordingly pay a high rate of interest expense -- which is generally unwise and indicative that we are poor stewards.  Please go to both 0114A and  0911  for more information.
        I submit that the
Debit Card option is an appropriate use of such a card as it reduces the actions required of your bookkeeper --  of course, you must reflect it as a disbursement (using the Plastic purchase documentation, etc.), but there is no need to write out and process a check, etc.   It also, in my judgment, is complimentary to the preferred expense authorization method via the use of Plastic (rather than use a Purchase Order method) as we have set forth per this  0114B  link contents.
        If you are on the receiving end of things (see  0907 ) --  like getting paid for Tuition or Fees at a
School via Plastic -- you would, in essence,  by using the Debit Card,  need to get permission to write a check on the Parent's bank account.  Of course, you will change your registration process within  7005  and, since the monthly Tuition and Fee amounts will vary throughout the year, you will come up with a maximum amount permitted by the Parent.  As to a Church situation, some Church leaders understandably have debt concerns about their people making contributions using plastic. The Debit Card  option does not add to their debt.

Internal Auditors (6)

        If your Ministry handles a million dollars or more each year, you would probably benefit by having an  INTERNAL AUDITOR.  Please go to  0038  and find out more details about such matters as the following:

  • The INTERNAL AUDITOR complements your External Auditor both during the year and at year end

  • The INTERNAL AUDITOR works for and reports to the Board Finance Committee - not to a Ministry Executive

  • The INTERNAL AUDITOR functions as an insider looking out -- not an outsider looking in

  • The INTERNAL AUDITOR contributes to good Financial Internal Controls and relevant Finance Policies and procedures

  • The INTERNAL AUDITOR attends most Board Finance Committee meetings

  • The INTERNAL AUDITOR is knowledgeable about Computer Fund Accounting - see  0601 re QuickBooks

  • The mentality of an INTERNAL AUDITOR is one who looks over your shoulder and provides desirable direction, but does NOT execute financial transactions. 

Invitations to view my desktop (7)

    In the last month, I have remotely dealt with four Churches using the  GoToMyPC   product as I explain at  0130. These were two Nazarene and two Baptist churches located in Iowa, Southern Calif, Virginia and across town here in Fresno.
    Here is what we did: The software is all on my computer and I sent these Churches a special email that allowed them to click on some email links with the result being a message appearing on my desktop that they had responded and that I needed to allow them to use their cursor to do things on my desktop. One Church had to phone me using a cel phone because their system could only handle the Internet connection while the others could connect up via the Internet and via a phone at the same time. One time their cel phone was not adequate so we communicated while online using the Chat Box option.
    While Online together,  we were especially intrigued (one Treasurer called it "magical") as we speedily moved any type of large file from one desktop to the other. At all four churches we moved QuickBooks files back and forth and when we were connected up the Treasurer at their end could use their cursor and perform any function on the QuickBooks file on my computer as if they were at their own desktop. It was great as I "looked over their shoulder" and helped them do such QuickBooks  betterment things as: 1> Structure and resolve different fund accounting matters found in  0041;  2>  worked though which QuickBooks Fund Acctg method to use as explained within  0601;  3> set up and processed clergy payroll matters; 4> do or clean up bank reconciliations; and 5> produce special reports and proofs.

 

Photo and Video (4)

    Accountants, like most professions, have their own terminology.  Down through the years in working with Ministries I have tried to not use accounting terms like Balance Sheet and Profit and Loss, or I have used the term Photo for Balance Sheet and the term Video for Profit and Loss.  Please Click here as to some needed "vital signs" information as you pursue the following fundamental reporting objectives and the essential financial information that the Ministry Finance Team must have and understand.

OBJECTIVE #1

Provide  "Point in Time" info.   Timely answer questions that have to do with PHOTO or "Point in Time information --- like a photograph, or a snapshot" - in accounting terms we usually call this a Balance Sheet.  See below.

  • How much Cash/Bank Balance is on deposit;
  • How much does someone owe us right now;
  • How much belongs to the INTERNAL DISCRETIONARY FUNDs or EXTERNALLY DESIGNATED FUNDs  at this time.
  • Equally important, what Non-Cash Resources do we have at this time,
  • Plus what Unpaid Obligations (or Bills) do we have - whether due now or in installments?

OBJECTIVE #2

Provide "Period of Time" info.  You MUST be able to timely answer questions having to do with VIDEO, or reporting of activity during a "Period of Time --- like a Video or Movie":  the usual accounting terms for this report is Profit and Loss (P&L) or Income Statement.

  • What has happened since the first of the fiscal year to the current Point in Time,
  • What did each Fund start with and what type of Revenues, Expenditures and transfers among Funds caused the balance in each Fund to increase or decrease?

OBJECTIVE #3

Provide "Where are you in relationship to where you planned to be" info.

  • You need to timely answer Actual to Budget questions that have to do with Video activity within the INTERNAL DISCRETIONARY FUNDS (or the General Purpose or Operations Fund)
  • Or how does the actual activity, since the first of the fiscal year, compare to what was planned/projected (yea,  Budgeted) for this period of time? Often by appropriate Department of the Ministry.
  • This process is usually not that important for Special Purpose Monies, since you can  only spend the available fund balance as shown by the Photo report.

OBJECTIVE #4

Provide "What is the perspective of this Photo and Video financial data" info.

  • How does this information compare to meaningful Ministry Finance data. 

  • As a decision maker, you need to view the 'Big Picture' and follow financial trends.  Click here and here  for a view of such matters in a church setting.

  • We refer to such reports as "KITS", or "Key Item Trend Statement".

  • Another name for this type of reporting is "Executive Summary".

"QuickBooks Online Edition" information  (8)

  
 The following comes from biased QuickBooks sources, but it point outs that the use of  "Web-Based Accounting"  tools, as explained more in depth within  0801 and  0904  ,  is gaining momentum.  I trust that Ministries, who handle some $500,000 or less per year and are comfortable using the Internet,  are making use of tools like this. Let us know anything on this topic at QBOE@bcidot.org

    "Internet access among small businesses has increased by nearly 30 percent in the past two years, prompting more owners and managers to turn to the Web to manage their daily activities and managing their finances is no exception. According to Intuit, Inc., the makers of QuickBooks, QuickBooks Online Edition has seen its user base increase by more than 200 percent in the past year - expecting to reach 10,000 subscribers by the end of July 2003.
    Intuit research shows the increase in subscriptions is due in part to strong word of mouth from current users. More than 90 percent of the QuickBooks Online Edition user base would recommend the service to accountants, business associates or friends.  "We've always known that QuickBooks Online Edition was a great solution for small businesses wanting to take advantage of the Internet's flexibility. It was just a matter of time before word of mouth started to spread," said Allison Mnookin, vice president, QuickBooks, Intuit, Inc. "Our success is due in large part to our focus on providing small businesses with a simple, easy to use solution with the functionality they need most, vs. overwhelming them with a suite of applications they have no use for and can't afford."
    Surprisingly, interest in QuickBooks Online Edition is not limited to early technology adopters. Recent Intuit research found that the average QuickBooks Online Edition user is an average small business - ranging from realtors and painters to consultants. Most have turned to the Web because they wanted to access their books from multiple locations (75 percent) or needed more than one person to access their books (50 percent).
   
"The strategic importance of the Internet to small businesses nearly doubled from 44 percent in 1999 to 81 percent in 2002," said Helen Chan, senior analyst, Yankee Group. "As broadband penetration grows, small businesses are learning how to leverage the Internet to adapt to their business work style. Because of this, a growing number of businesses are becoming more amenable to solutions like Web-based accounting, as they can more readily accommodate changing organizational dynamics in the business."
    This also benefits the small business and their accountant. The accountant can set a client up on QuickBooks Online Edition so the accountant can remotely access the client's financial data "behind the scenes" at any anytime, without having to disrupt the client's business. This helps the client to avoid getting bogged down with accounting issues, and it also saves the accountant time from having to travel to and from the client's office or transferring files back and forth.
    QuickBooks Online Edition subscriptions start at $19.95 per month for up to three users. Access for subscriber's accountant is free (registration required). Support is provided at no additional charge. For more detailed product information or to access the 30-day free trial, visit http://www.qboe.com.

Mom@Home/Small Ministry system (1)

        Please evaluate the following scenario: 
        Let's suppose there is a Ministry that handles less than $500,000 annually that I will call "
Small Ministry" and it uses the QBPro2001 (QBooks) software product that they obtained inexpensively via eBay.   Then I have  "Accountant Mom",  who works from her home in the state of Washington, and serves "Small Ministry"  remotely -- their contact is by phone, email or via use of her desktop product known as  GoToMyPC  .   "Small Ministry"  is located in Florida and  their Bank - ECCU -  is located in Southern California -- they make deposits to their ECCU bank account using their local Bank of America branch near their Florida office.
        Further,
"Small Ministry" has an Online Banking relationship with ECCU (called ECCU-Web) that permits them to use the Internet to access the equivalent of their Bank Statement at anytime. They also have access to the Credit Card Account online. The ECCU-Web system further allows them to post their bank statement equivalent data directly to their QBPro2001 software system. 
        So -- big deal,  you say ---- this might place the latest Bank Statement info into the software, but it does not distribute the needed deposit and check information into the system.  You are absolutely correct,  except that
"Small Ministry" goes a step further by contracting with "Accountant Mom" to do at least the following:

    >>  "Small Ministry" uses a set of QBooks (we'll call this one QB01) to make deposits and write checks (including clergy payroll) that includes distributing them per the agreed Chart of Accts.  Please Click here for some info about a suggested numbered Chart of Accts, etc.
    >> 
"Accountant Mom" maintains a second set of QBooks (we'll call it QB02) that accepts the above info from ECCU-Web.
    >> 
"Accountant Mom" regularly uses the  GoToMyPC  system and arranges for "Small Ministry" to view  the above QB01 set of QBooks as remitted Online to her.   She also will probably have transaction questions that they resolve as they both view from "Accountant Mom's" desktop the information within QB01. She now has two sets of QBooks.  She discovers how to distribute the deposit and the check transactions from the QB01 info and she updates QB02 accordingly. 
    >>  She never has to Bank Reconcile because her Bank Account data within QB02 mirrors the ECCU-Web provided Bank Statement equivalent.  There may be times, like at fiscal year end, when she would record uncleared deposits or checks for full accountability, etc.
    >> 
"Accountant Mom" then proceeds to be satisfied with other aspects of QB02 and she timely produces QB produced financial statements within QB02.  Then arrangements are made for the content of QB02 to be available so the  "Small Ministry"  has the needed QBooks provided financial reports for their needed management purposes.

    More details of something like the above scenario is set forth within   5109 but especially digest the content of  1211 with respect to these functions via Internet Centric (Or Internet Friendly) resources.  Also be aware after July 2006 of this  SPENDING CONTROL  web site.
   
Another option is for all of the above parties to function via a common Internet QBooks system as set forth within  0801.
   
From my perspective,  this type of service provided by the qualified Mom above, who wants to stay at home with her kids, and yet needs to earn some money, could be a real blessing to all parties involved.  Contact us by Email for more info.

Anniversary (2)

        I try not to include strictly personal items here, but as I conclude this edition of JIMs JRNL I thought it might of interest to you that Bettie and I celebrated our 50th wedding anniversary this month as done by our 4 kids/spouses and 10 of the 11 grand kids.  The missing grand daughter was in Australia on a Mission Trip - but she phoned during the celebration - bless her heart.  Over 100 folk from all over met at our church here in Fresno where we heard our 4 kids do some reminiscing ---- you know;  about goofy songs we sang while we were driving in the car on vacation and Dad's (mostly) and Mom's oddities, etc.  It was extra special to have on the sign-in table a free lance drawing of our wedding picture by our 12 year old grandson, Nick.  Bettie has been and is a very very SPECIAL "Virtuous Women"  that the Bible commends !!  The Lord has greatly blessed us! 

   DEAR LORD:  I thank you that all four of our children are with their one and only spouse -- kinda uncommon in this day and age.  Thank you for each one of those special friends and loved ones who shared this occasion with us.  I am especially thankful for Bettie, my dear wife for all these years.  Thank you for our youngest, Trudy, who gave so much of herself as she spearheaded this Anniversary celebration time.  In the PRECIOUS NAME OF JESUS - AMEN !


 Possible "Frequently Used Vocational Terms" appear below:

            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; SPFunds or SPFs = Special Purpose Funds


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This document was updated last on:  April 20, 2011