"JIMs  JRNL" Edition
   (Click Here for "Blogger like" perspective/rationale)   
              

Links on our Website include:  HOME  |  ABOUT  US   |    OUR PURPOSE   |   SITEMAP   |  COMPUTER FUND ACCTG  |  HELPS   |  GLOSSARY 

- - And the Lord direct your heart in the love of God as you continue to faithfully serve Him - -


To:   Interested Onliners                                                                                                          FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                                                                        
   
 RE: J I Ms  J R N L for the month of March 2008                                                                  FILE:  0203-08/jrnl                       


(1)   "Tips" or  "Tithes" --  (01)

        Does a family at your Church need some encouragement toward   "Righteous Personal Finance"   management --- or instruction as to their money stewardship to the Lord?   A way to evaluate if the Church should be providing some assistance along these lines is to go through the following steps and give your leadership some indication of who provides "Tips" (or gratuities, if you please) when they might be providing something more like "Tithes."

>> At about the same time in January when you provide your usual Church families with annual "Giving Record" information
>> Extract a giving total via the list of those regular attendees (not by name - total only)
>> Who have given something like $1,000 or less for the entire calendar year
>> Compare this to the total overall annual giving amounts for the year and determine a percentage, or ratio.
>> Evaluate the trend by comparing this ratio to that of prior years.

(2)   Alphabetical Listing of recent JIMs JRNL Topics --- (04)

        This is to remind you that when you  Click Here  you have access to an Alphabetical Listing of recent JIMs JRNL Topics  that have appeared in recent editions of this monthly publication.  

(3)   "Internal" and "External" reporting of Ministry Finances   (03) 

      As an Accountant at a Ministry, your overall "Internal"  financial accounting/reporting responsibility is to see that Ministry leaders timely have the applicable "Financial Facts" before them so they can make meaningful financial decisions.  This includes at least such things as the following: 


>>  How much of the Ministry's Bank balance is not available --- or how much is involved and why it is "Spoken For".

>>  What is the remaining available money after the recording of all known operational expenditures.

>>  And this money is under some appropriate  "Spending Control  system/method.

      With these issues in mind, you need to properly and consistently do your financial record keeping/reporting.  Please go to   GAAP   and learn what Accounting Professionals have set forth as rules and regulations as to such matters.  You will notice that this link content separates these matters between that which applies to daily operations for your  "Internal"  reporting purposes and that which pertains to reporting to the public at your fiscal year end  for  "External"  reporting purposes.  
       Two prominent examples of such differences are the accounting/reporting for the costs during the year of   "Debt Servicing" and the acquisition of "Equipment, or such other Fixed Assets."   Usually the "External"  reporting matters are dealt with only when you do other year end matters, but , please  Go Here for details if you want to take care of the "Internal" and "External"  reporting entries at the same time.  You also might find of interest the overall  Fund Accounting matters set forth when you  Go Here . 

(4)   Finance  FUEL  that you resourcefully "Fund" and purposely "Spend" (02)

         I like to view finances as one of the "FUELs" needed to accomplish a Ministry's purpose.   Very simply .... it takes money  (a necessary FUEL)  to get things done!  These efforts take responsible human beings who carefully use their "Gift of Administration" and proper tools/systems as the Ministry covers the two economic areas of  "Funding"   and " Spending".
        This includes not only Cash but also Non-Cash fiscal "FUELs" like facilities, equipment, and materials  - plus some Ministries may need to account for sums yet due to the Ministry for applicable reasons.  Suffice  is to say, the Ministry needs to prudently use such God-provided resources, or FUELs ,  as it judiciously ---

     M)arshals  ---- First you must rightfully   'obtain' money',  or garner the FUEL. 
     M)anages
  ---- Then you MUST prudently  manage and efficiently use  such FUEL  resources .
     M)aintains ---- Land, Buildings and Equipment  are FUELs  that you spend now and make use of over a longer period of time ...   make the very best use of these resources.  Sometimes the FUEL is temporarily not used  now, so...manage money deposits  prudently.  Be righteous about 'hoarding' ... you need to be prepared for abnormalities (emergencies, if you please), but the FUEL needs to be properly consumed. 

(5)   Personal Finance Matters or Issues  (05)

       Operative Matters or Issues

 ----   Prudent pre-planning
 ----   Timely knowing your "Financial Facts" and
 ----   "Prayerful Discipline" --- making full use thereof

    What follows is targeted to Personal Spenders, but can equally apply to any  Smaller Ministry.  You only spend from available balances within your pre-approved Categories using Plastic or Checks.  In order to assist you in keeping good spending records,  you spend via Green Stuff/Coins only when you have no other choice.  You discipline yourself to always know if you have available money to spend (or you have done your essential  Money Record Keeping  ).   Then,  you prayerfully discipline yourself to spend only if there is a balance within that Category.   You do all of  this by taking such steps as the following:

   #1 -- You already have decided how your receipts are to be righteously spent (or you have done some advance righteous planning and/or budgeting, etc)  via pre-determined  Categories of your life style.  You do not cash your normal income checks (net pay or retirement checks, etc) or all receipts are deposited into your Bank Account . Having all of your money/receipts within the Bank enables you to better:
   #2 --  Do all of the necessary re  Money Record Keeping and Reporting ;  this could include weekly paying off your Credit Card (Plastic) balance and writing all of the necessary Checks so that:
   #3 --  You know weekly if you have any money to spend .... per your Categorized spending limits information, etc.
   #4 --  Working from this information, you diligently spend using Plastic or Checks or via the ATM.  You only spend via Green Stuff/Coins when you have no other choice.  You discipline yourself to always know if you have available money before you do any spending (see Step #2 above) and then you further prayerfully discipline  yourself to spend only when there is a balance within that pre-approved life style Category

(6)   Float Management  (06)  

        In furtherance of a Float Management effort so that a Ministry can earn the maximum amount of Interest Income,  some Financial Institutions provide Ministries with a "Sweep" process usually based on the use of the following three accounts; 

1 -- Regular Checking Account , 
2 -- DIBS or some type of "Daily Interest Bearing Savings" account and a
3 -- LOC or "Line of Credit"  temporary borrowing  mechanism. 

     The Financial Institution  daily "sweeps" these accounts and either reduces or increases  the Checking Account balance as money is automatically moved to or from the DIBS account.  The objective is to, at the end of the day, leave a minimum agreed amount in the Checking Account and a maximum amount within the DIBS Account.  If there is temporarily nothing in either the Checking or DIBS accounts  then available money comes from the LOC ----  then it  zeros out as a part of subsequent "sweeps" .   Please   Click Here  for more details of how you can obtain as much Float Management  (Interest) Income as possible.  Of course,  it is very logical for you to pay agreed fees for such Float Management, or Sweep services.
    The  Evangelical Christian Credit Union - ECCU  provides some Sweep  services.   ECCU also provides their members (Individuals or Ministries) with some fantastic Online Services that they call their  EC*Web system that can be a real blessing as you go online and obtain today's Bank Account details .... virtually as if you had your hard copy of the monthly Bank Statement in front of you.  Like at other
Financial Institutions,  ECCU's  transactions can also be uploaded and electronically posted into certain desktop software like QuickBooks.  Click Here  and search for more specifics. 

(7)  Finances at a new Church (or any new Christian Ministry)  (7)

        Are any of you readers in any way involved in the establishment of a New Church  (or other type of  new Christian Ministry)?    If so, I trust that you find of value the dialog and related web page links placed within this "Lil Sister Church" web page found at  5050  plus  this Website content when you   Click Here.  and go to their Sitemap. 
        Please especially note the possible ways you have in using the Internet and remotely do such things as: 

01> The Bookkeeping of "Board Assigned" or "Donor Restricted" monies.  Click Here  for some more details.  
02>
You have weekly knowledge of how much can be spent -- such critical information goes beyond the balance in the Bank Account, etc.  Click Here  for more information about this.
03>
  Appropriately handle your Clergy Payroll, etc.   

         Such remote resources are such a blessing --- particularly when your new "Ministry Finance Team" is just learning how to do their job, etc.

(8)    Self Funding Activities at a Church  (08)

                I trust you find the following dialog helpful on this topic of accounting for Self Funding Activities at a Churchi

QUESTION #1

        What is your "spin" on accounting for monies paid to the Church by those going to Church events?    

            ANSWER #1     

        First, I suggest that you digest the content of the foundational "Fund Accounting" document found at  0041 , as you learn about how that monies come in that must be used for unique purposes at the Ministry and how it MUST use appropriate accounting techniques and principles. There are General Fund (GPFund) monies that are to be used for the general operations of the Ministry,  plus there are also Special Purpose Funds  (SPFund) money that pertain to non GPFund matters. Some of my overall convictions on this topic follow:

>>  Such money received is an "Expense Reimbursement" and does not appear in the accounting records/reports as Ministry Income per se.  See comments at  0063  about "Defrayments" - of course, none of these amounts are tax deductible.   However, when you have a pre-approved Missions Trip, then you have Contribution Income which is tax-deductible.  See also one of his sample Big Pix reports where such money appears as an expense (offset).
>>  Smaller Churches will likely reflect such monies as either a reduction of an GPFund Ministry Expense line item or, preferably, as a negative expense (offset) which appears next to it as a separate GPFund line item. 
>>  Larger Churches will need their system to go beyond this because of the degree of such endeavors.  A
Self Funding Events/Program at a Church/Ministry should be a type of SPFund plus such Events/Programs may require some type of a Accounts Receivable system to record who has and who has not paid their bill.  The operational year of such Events/Programs at larger Churches often do not coincide with the Church's operational (fiscal) year.  Another issue is that since the reimbursement proceeds seldom cover all of the Program's expenses,  the balance must come from the GPFund.  It is usually best for each Programs to have its own SPFund as you monitor the bottom line and all of the expenses and said reimbursements.

QUESTION #2

        What are the names of such Events/Programs at a larger Church?  What accounting steps and reports do you recommend for such Programs?   Sounds to me like all of this could get very "messy".  Please give us some specifics.

            ANSWER #2

        OK --  below is a grid (or analysis) of information as of March 31, xxxx  re some specific Church Events/Programs which require such special handling.  This Church has a March 31st fiscal year end.

Inventory or Advance

Deposit made

 Events Timing

 

for facility, etc.

People paid

I.D. of Event/Program

Begins

Ends

Shortage

or Reservations

in advance

  Annual Camp A

June

July

$ 7,000

  Annual Camp B

July

July

$ 2,500

  Annual Conference 1

May

May

$ 1,000

$1,869

  Annual Conference 2

June

June

$ 1,500

$ 250

  Mdse on Hand - like unsold Choir CDs etc April Mar                 $ 500

  Annual Vacation Bible School

July

August

$ 1,575

  AWANA or like Midweek

         Children's Program

Sept

May

$ 5,123

  Event A

April

April

$ 187

$ 2,397

  Variety of Church Events

April

Mar

$ 7,500

  Summer Athletic Program

June

August

$ 200

      Totals

   

$ 7,500  

$ 18,371

$11,414

 

Net Difference

                $ 14,457

 

        The above $7,500 is ultimately funded by the GPFund:  When a particular Church Ministry developed their annual Church budget they got approval to spend, let's say, $3,000 on their Event/Program, but they planned for $2,500 to come in from participants - or they expected that much "Expense Reimbursement or Defrayment."  Then this Church Ministry looked to the GPFund to pay for and zero out the difference of $500.   Let's suppose that the total GPF approved amount for the fiscal year above was $8,250, but they only needed $7,500. 
        Below is their condensed March 31, XXXX fiscal year end Balance Sheet  - note that this overdraft of $14,457 has its own category within the SPFunds area below as "Self Funding Events/Programs." 
        In the annual audit report only, the above $7,500 will be zeroed out as paid by the GPFund; the $18,371 will show up as Prepaid Expenses  and the $11,414 will appear as Deferred Income.  The total of these numbers equal $14,457.  The "doing business with yourself, or the offset dollars of $7,500 mentioned above does not appear in the annual GAAP compliant annual report.

Assets

Checking and Savings

$ 74,538

Petty Cash Funds

$ 1,850

   

Other Assets

$ 2,845

 
 

Total Assets

 

$ 79,233

Liabilities

Due to Vendors

$ 2,745

   

Due on Credit Cards

$ 12,899

 

    Total Liabilities

$ 15,644

Equity-Special Purpose Funds

Donor Restricted Fund Bals

$ 5,496

Missions Fund Bals

$ 12,875

Board Discretionary Fund Bals

$ 54,250

Self Funding Events/Programs (overdraft)

($ 14,457)

   

GPFund Net Income for the Fiscal Year

$ 5,425

 
   

    Total

 

$ 63,589

 

Total Liabilities and Equity

 

$ 79,233

QUESTION #3

        We use Quickbooks (QBs)  Method One to do our Fund Accounting. where these Self Funded operations are placed within the SPFunds     I have not been able to figure out a way to do budget accounting/reporting within the QBs Equity accounts.  Any suggestions?

            ANSWER #3

    A very good option is to include all of your Self-Funding operations within the GPFund and the usual QBs Budget process.  But if you prefer using the QBs Equity Accounts you would use Excel to do your Actual to Budget Spending Control with a year to date (YTD) emphasis.    Or you enter the annual budget by type of that Activity's operating expense into the Excel doc and you then manually input the YTD spending amounts as provided by the QBs Class accounting process   You can use the Excel  formula to automatically compute the amount of "Actual to  Budget"  YTD variance for that expense, etc.
    Please go to  5025  for details of  how a Church can set up it's own set of QBs to better account for money due them for events and to accommodate the event's operating year (or the Activity itself straddles two fiscal years of the Church) and then use the usual budget feature of QBs for controlling the operating costs of such events, etc.

Click below for Potentially Helpful Online Links for JIMs JRNL Readers  

       Five Tips to Increase Online Tithing   How to increase Online Tithing  About Kluth    IRS Publication re 1099s     Free Money Management   
Board needs to get Data

Monthly Editorial - "For What It is Worth"  as originally rendered in September 1999      Retired Onliners and Ministry Finances

Current "Ministry Finance" Truism

    Below is one of my Ministry Finance precepts/beliefs/principles, or  "rules of thumb". Please go to  0069  for complete TRUISMS list:

Float Management;  it is poor stewardship to leave too much money in Checking Accounts that do not earn Interest Income

Prayerful Thots

   Dear Lord, the following portion of "First Thessalonians" so very much applies to those Readers who so faithfully carry out their Ministry Finance responsibilities:     "We continually remember before our God and Father your work produced by faith, your labor prompted by love,  and your endurance inspired by hope  in the Lord Jesus Christ."    Lord, we honor these dear Brothers and Sisters !.  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


HOME  |  ABOUT  US  |    OUR PURPOSE   |   SITEMAP  |  COMPUTER FUND ACCTG   |  HELPS    |  GLOSSARY

Click Here and go to a list of earlier JIM's JRNLs - Contact  Jim@bcidot.org 

This document was updated last on:  November 15, 2010