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 April 2008                                                            FILE:  0204-08/jrnl                       


(1)  --  Self Examination of  your Ministry Financial Matters   (08)   

   How long has it been since your Ministry leaders made an objective evaluation of your finance endeavors -- or you graded yourself on such matters?   When you  Click Here  you will find some resources that will help you do this.  We suggest that this be done annually perhaps when your new committee members begin to function since they would view things via fresh set of eyes, etc.    

(2)   -  The ATM and laptop "Computer FinFax System"- (02) 

        It seems that very few people (especially the younger generation) actually go into a Bank these days.  Most of us primarily use a ATM located anywhere to get "Green Stuff" or occasionally make deposits to our Bank Accounts. 
        How many times have you watched someone first go to the ATM and then afterwards sit in their car for some time?   It seems that they are "Internet Friendly" and are using their mobile laptop computer to work on their finances.  If any of this above activity is part of your Christ-Centered life style, I highly recommend that you use a mobile laptop  "Computer FinFax System"  (the samples herein might emphasize Ministries activity, but the principles are the same re bookkeeping for Individuals or Families) as the  Reports  therefrom tell if you if you have money to spend.  Please  Click Here  for more information about all of this.  Below is a seven step process setting forth how you might utilize such tools so that you have information to "Control Your Spending," etc. 

         01> Your periodic pay check is deposited electronically to your Bank Account and you appropriately buy everything possible using Plastic -- via either the Debit or the Credit Card process. And more importantly, you are not in debt to a Credit Card company since you, in a very disciplined manner, pay off the balance weekly. Let's suppose that your use of Plastic this week did NOT include the use of the Debit Card (or check equivalent) and on Thursday (either at home or during your free time at work) you go to your Online unpaid "Credit Card Statement" and you made a hard copy -- see  05> below. Since this has a weekly "fresh in your mind" emphasis, it is seldom necessary to keep copies of those Credit Card tiny pieces of paper -- but, of course, you can always attach them as support for these charges. You then go Online and pay off the balance and this Online Payment will appear in your Bank Statement as if it were a check transaction.  Again, see  05> below.
         02>  Each Thursday you use the Online Payment process to manually pay as many as possible of your other bills. Then you hand-write checks for all of the other unpaid known bills.  The following can, of course, be done at home or in your office during your free time, but let's suppose that on the following Tuesday you take your car to your favorite ATM and you use your mobile laptop there to update your personal books.
         03> You go Online and you access your "Bank Statement" and you electronically move your "Bank Statement" transactions to your  "Computer FinFax System."  Please Click Here for more details of how this is done. Or your "Checking Account" therein shows all of such activity plus each transaction also appears in an offset "Unclassified Account" .
         04> Maybe while sitting in your car you then use your laptop to update your "Computer FinFax system" that would include at least the following:  You reclassify your deposits appearing within the "Unclassified Account" as you place them into your respective "Spending Area" accounts of your personal set of books.  And you reclassify your regular checks or Bank Charges to the applicable "Spending Area" account.
         05> One of those check equivalents of last Thursday was to pay off the balance of your Credit Card statement. So you work from the data within your Credit Card payment print out, and you distribute per the named vendor to the applicable "Spending Area" accounts.  It is not good to show a Credit Card total into the "Spending Areas" -- it is best for you to know the name and amount per Vendor, etc.
         06> You make sure the "Unclassified Account" therein is zero-ed out as each transaction should now appear within the applicable "Spending Area"  account and you make sure that the Online Checking/Savings bank balances are the same at that shown within your "Computer FinFax system." Or you have, in essence, done your periodic Bank Reconciliation of making sure that your records agree with that of the Bank, etc..  Since you do this weekly you are not concerned about deposits or checks that have not yet cleared the Bank.
         07> This system can now provide you with a report (Click Here for a Sample) that shows you just how much reconciled money you have in your Checking/Savings Accounts -- plus other personalized data  But more importantly, you know who belongs to this money on deposit via the respective balances appearing in the pre-approved QBuxBox "Spending Areas" of your life style.  Please be sure and  Click Here for access to more details and samples of such reports. Or you now know if you have any money you can spend during the following week, or if you can appropriately
use the ATM and hopefully get some "Green Stuff".

(3) -  GAAP ( Generally Accepted Accounting Principles) at Ministries  (3)  

     So what is GAAP ( Generally Accepted Accounting Principles) at MinistriesWe professional accountants must do things 'according to hoyle',  or we have certain pronounced finance accounting rules and regulations as financial information is captured and displayed for applicable users. 
     Some of these GAAP issues are generic and some pertain uniquely to finances at Ministries, or Non Profit Organizations
.   By the way, some view the "P" in GAAP to also include "Practices", "Procedures" and/or "Policies."  It is our opinion that Ministries GAAP issues are best divided into the following two categories:  

  •   Non Year-End - or Daily /Monthly  GAAP matters -----  as applied for internal management reporting purposes, and then
  •   Year End  ONLY  GAAP Specifics ----  or the emphasis is for external reporting purposes to your public, etc.

    Please  Click Here  for more of our information about all of this.

(4)  -  "ASSURORS"  at Ministries --  (04)

        We define an "ASSUROR" " as one who provides a Ministry with finance creditability helps but is not a part of your outside CPA-Audit  firm.  Your Ministry should be the very best fiscal steward   ----- you remember that you are virtually handling fiduciary/trust funds.  You should strive in as many ways as possible to add credibility to the completeness, and veracity, of your finances.  With this in mind, below is some more information about  "ASSURORS":

  A> This person may or may not be a part of the Internal Audit Committee  that we discuss when you  Click Here and HERE.   Maybe this group should care for some of the ASSUROR's task assignments here and perhaps even change their name to Internal "ASSUROR" Group or Committee.
  B
>  Further such an ASSUROR effort may function either locally or via the Internet.  See content of  HOMERS  plus material below.
  C>  If you are a QuickBooks (QBs) user, such software is too "User Friendly."   Or some of the Financial Internal Controls rightfully needed at a Ministry using QBs are insufficient.  We highly recommend QBs for Ministries that we discuss at  0041 and 0601  as they make full use of QBs. So in 0647, we thoroughly discuss needed Financial Internal Controls intrinsic to QBs that must be pursued.  See also the content of  0676
  D>  A  relationship with an ASSUROR can be a formal or an informal arrangement depending on whether or not the Ministry needs some type of limited written attestation from the ASSUROR.   Again, please see the information and assignment tasks as set forth within both  0676.   You might also find of interest my reference to ASSURORS when you read the contents of   ECFA
   E>  If your Ministry has a resident Bookkeeper-Accountant who processes the bulk of your financial transactions, the volunteer Board Treasurer can readily function in certain ways as part of this needed ASSUROR effort.
   F>  I am convinced that Churches should make full use of available CPA-Auditor Church member volunteers for specified  ASSUROR   purposes - even if some of such an effort is done remotely via the Internet.

(5)  --  Annual Budgets and "Virtual Debt Servicing" - (5)

        Let's suppose that your Church is planning a Building/Construction effort.  This usually means that some of the Building costs will be paid from borrowed money.  In also means that your regular Operational   income MUST be enough to make monthly "Debt Servicing"  (Principal and Interest)  payments. 
        Accordingly, we recommend that before the actual Construction your annual Budget  include a process that we call "Virtual Debt Servicing".  The rationale and the overall process is discussed in more detail when you   Click Here  Until needed for actual Debt Servicing this Board Discretionary  "Virtual Debt Servicing" money is placed into the Church's own
Building Fund.          

(6)   --  Building Fund Accounting  (06)  

        Are you starting a Building/Construction project at your Church or Ministry?  Or do you know someone who is and could benefit from some accounting perspective about this usually very extensive special project?  If so, I recommend a study be made of what Brad has shared in the web site content found when you  CLICK HERE
        Please also note what is shared in a recent JIMs JRNL showing samples and comments on this topic as found  HERE.  You will note that two separate QuickBooks (QBs) set of books are used;  please particularly note the respective comments made above about the use of the normal "Operational" set of QBs and the abnormal "Building Fund" set of QBs .

    A> - The transactions within the "Building Fund Clearing" account within the "Operational" set of books appear as "Bank Account" activity in the "Building Fund" set of QBs as they mirror their activity except, of course, in the apposite direction.
    B> - By doing this, you do not clog up the Church's normal -
Special Purpose Funds- operations with the activity of this very abnormal "extra" Special Purpose Fund (i.e., the Building Fund).
    C> - Using the "Building Fund" set of QBs enables you to account via a "Cash Flow" emphasis as "Cash Receipts " are shown as "QBs Income" -- even though some were in fact "Loan Proceeds" cash inflow and not "Income" per se.
    D> - Plus you show all of your "Construction Costs" as "QB Expenses", or cash outflow, even though they will, of course, be ultimately capitalized as Ministry "Fixed Assets".
    E> - You are able to use the QBs "Actual to Budget" reporting feature to "Control Spending" in applicable areas of the overall  project.
    F> - This "Building Fund" project often covers far more than 12 months, so you are not limited to the fiscal year aspects of the usual "Operational" system, etc.
    G> - The indicated bottom line, or the Cash Flow's "Net Income",  will always agree with the balance in the
"Building Fund Clearing" account within the "Operational" set of QBooks.
    H> - Finally,  this approach allows you to prudently "Borrow Internally"  from available discretionary pooled monies on deposit in an efficient manner during Construction and, of course, reduce the amount of  Building Fund   "External Borrowing" and related costs.

(7)   -- "Big Pix" Reporting - (05)

        Maybe you can identify with this --- you are at your Board or Finance meeting and you have no less that six pages before you as the Treasurer is appropriately discussing your finances in depth.  Have you ever said to yourself?   "Gee, I wish I had an overview of all these relevant financial facts all on one page."   Well that is exactly what the following link contents are all about --- we reference such samples as a "Big Pix" report:

         01-Glossary    02-Key Item Trend Statement  03-Not Produced by QuickBooks   04 - #1 Sample at a Church   05 - #2 Sample at a Church    06- #3 Sample  07 - #4 Sample  and  08 - #5 Sample 

         I hope these samples give you and your Ministry Finance Team/Treasurer some ideas about getting such stuff all on one meaningful page.

(8) -- School Accounts Receivable (SCHAR) Management - (07)

     Maybe you are involved with someone who is responsible for the finances at a Christian Day Care or School.  Since the management of their "School Accounts Receivable (SCHAR)" is critical to their fiscal well-being, may I recommend  the following:
  
                                                                                
--- SCHAR TRUISMS ---

    1>  For complete SCHAR and related Income knowledge, the School must account for Tuition and/or Fee Income when earned ---  or, at least for SCHAR income accounting purposes it is on the "Accrual Basis" rather than the "Cash Basis" of accounting.
    2>  It is vital for constant agreement of the General Ledger
SCHAR Control Account and the Subsidiary. This financial internal control feature means that the total reported amount owed (or prepaid) must ALWAYS agree with the detailed list of amount owed (or prepaid) individually by each Parent.
    3>  Some Parents get a discount and prepay a number of months, or even the entire year, in advance. Such prepayments result in handling money that is unearned, or there is a liability that must be regularly known by management.
    4>  Most Parents make monthly payments.   What is owed to the School by the Parents MUST be fully monitored to insure that Parents make monthly payments as agreed.
    5>  In our judgment, It is more declarative to have two separate SCHAR control units;  one cares for the Prepaids by Parents and the other for the usual amounts due.  Having a separate Prepaid control unit allows the School to better track charges that happen throughout the year, since they are not commingled with the ongoing credit balances.  Plus management can more readily identify the unearned amount of tuition during the year -- see above.
    6>  If monthly payments are not paid when agreed,
the School has loaned the Parent money
and understood penalties (Late Charge fees - yea, Loan fees) are due.
    7> At the appropriate time, the Parents should no longer be borrowing money from the School, but they should borrow from some outside source. If this does not happen then the Student may have to be removed from school.

    To accomplish the above  TRUISMs,  we advocate the use of the accounting software known as QuickBooks (QBs). We use the term QBSCHAR to indicate the School Accounts Receivable SCHAR portion of QBs. We use the term SCHARAge to identify the periodic report from QBs which shows the age and amount yet unpaid per Parent. 
     Another way to "SCHAR Manage"  is to outsource such activity via such resources
found in 7013.

Click below for Potentially Helpful Online Links for JIMs JRNL Readers  

Attorney Frank's Sample Policies    
Seven Fund Accounting Goals      
Is Your Data Secure per ECCU  
Before the IRS Comes to Your Church per ECFA

Monthly Editorial - "For What It is Worth"  as originally rendered in January 2002  -  Email and Desktop Management

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

   HOLISTIC -  Churches and Schools often have sub-groups who are prone to do their "own thing."  But it is best for all Ministry finances to flow to their "Board of Leadership" via the Ministry's pooled Bank Accounts and/or via a unified or "Holistic" accounting system.

Prayerful Thots

           Lord, the above references to ASSURORS reminds me of the song "Blessed Assurance - Jesus is Minewhere we find life rendering, ASSURANCE for all things and for Eternity.  Also, Lord,  I was reminded that we are regularly in need of a Divine Heart Transplant.   We must have the proper heart and attitude that pleases You --- not ourselves or the world.  Thank you, Lord.  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 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