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This document was updated last on: July 09, 2011
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ABOUT US | OUR PURPOSE | TABLE OF CONTENTS | SPECIFIC SEARCH MATTERS | HELP DETAILS | FUND ACCTG VIA COMPUTERS | GLOSSARY
TO: Interested Onliners FROM: Jim Bramer, Retired Auditor-CPA
RE: J I Ms J R N L for the months of November & December 2010 FILE: 0210/1112-10/jrnl
-- Accounting For Church Remodeling --
Maybe your Church facility is such that you need to spend some $50,000 to do some remodeling. The Church has accumulated only $10,000 of Special Purpose Fund money so to accomplish this it gets a $40,000 loan from its Bank and does this remodeling over the next few months. Here is how this Auditor-CPA would account for all of this:
>> The Church currently uses QuickBooks (QBs) Pro and
>> It sets up a new QBs Company called “Remodeling” for this project.
>> And opens a new Remodeling Bank account just for this remodeling project.
>> The Chart of Accounts for this new QBs Company is as follows:-- QB Acct Type -------------- Number/Name
--------------------------------------------------------------------------
Bank 101 – Bank
Fixed Asset 140 – Remodeling Costs
Loan 220 -- Bank Loan Payable
Equity 350 – Church Revenue
Income None
Expense None
>> This Project is funded by these Special Purpose Fund donations and by possible budgeted amounts
from the General Purpose Fund. Of course, you write checks to the new Remodeling Bank account for
this project.
>> The Photo (Balance Sheet) of the new “Remodeling” QB Company would periodically show the
following:a> After depositing the Church’s check which clears out the Special Purpose Fund account.
======================================
101 – Bank $10,000
======================================
350 – Church Revenue $10,000
======================================b> After the deposit of the Bank’s Loan
======================================
101 – Bank $50,000
======================================
220 – Bank Loans Payable $40,000
350 – Church Revenue $10,000
======================================c> After the project is well along and used its own checks to pay for its costs to date and the Church members has provided $5,000 more :
======================================
101 – Bank $25,000
140 – Remodeling Costs $30,000
======================================
220 – Bank Loans Payable $40,000
350 – Church Revenue $15,000
======================================d> The Church have provided $7,000 more; plus it has written a whole bunch of
checks for the Remodeling Costs and used the remaining Bank balance of $12,000
to make principal payments on the Loan. This Bank Acct is now closed upon
completion of the project.
======================================
101 – Bank $ 000
140 – Remodeling Costs $50,000
======================================
220 – Bank Loans Payable $28,000
350 – Church Revenue $22,000
======================================e> This separate set of QBs has now served its purpose, so you place the Remodeling
Costs of $50,000 in your present QBs set of books as a Fixed Asset; you reflect the
unpaid Bank Loan of $28,000 as a liability and the $22,000 residual balance appears
as a Fixed Asset Equity account>> Of course, future General Fund budgets will now include “Debt Servicing” expenditures to pay for the remaining $28,000 principal payments plus the applicable amount of “Interest Expense”.
>> As explained when you Go Here, you can regularly reflect the reduction of the principal payments and the increase in Fixed Asset Equity. Or you can just do this as part of your fiscal year end closing effort.
-- Management of a Ministry's Spending Limits -
It is my personal conviction that Ministries should be as “Ministry Finance Internet Friendly” as possible as they utilize the meaningful tools provided by Computer systems and contemporary Internet resources. An understood major management need is for them to stay within their " Spending Limits". You are one who desires to do a better job of doing this, so you format your QuickBooks (QBs). accounting system within context of the following:
a> You structure your accounting system to accommodate your unique "Fund Accounting" needs. To do this you have a single General Fund that accounts for the Board discretionary money that you receive and spend. You also receive money for a variety of different Special Funds which are both Board approved Donor Restricted monies as well as that which is Board Designated .
b> Let's suppose that your "Actual to Budget" process by the type of General Fund. expense (see samples when you Go Here) with a department structure have not been adequate. So you control spending within the General Fund in a similar "running balance" manner as you do with your Special Funds. since you can readily control spending of such Special Funds because you always know its "running balance."
c> For example, after a Church’s weekly deposit, and before buyers make any weekly expenditures, they know:
>> The components of the unrestricted
“General Purpose Fund” as such money is assigned per the
“Board of Leadership”
priority order that is mentioned below for
upcoming “Fixed” Ministry
expenditures like:
Salaries/Benefits, Missions, Debt Servicing and
Operating essentials like utilities, etc
>> If there is any remaining balance of the “General Purpose Fund”
following the above "Fixed " assignments
that is now available to pay for any other “Variable”
Ministry expenditures; sometimes by department, etc.
d> To do this you divide up the General Fund into separate spending areas so that you are able to view available "running balance" balances in those areas of the General Fund . Please note the "600 Annual General Fund " series in the example below. If such an area has a "running balance" then you can spend, etc. You base this process on the principles set forth when you Go Here, You will note below that the Operating Depart 682 of the General Fund has only $44.88 to spend, while the Special Fund balance for Project 502 Project XYZ has $405.57.
500 Special Funds
501 Missionary Jones - Support
28.53
502 Project XYZ
405.57
590 GPFund (Deficit) from previous years
(5,706.41)
599 Board Emergency Fund
14,574.00
Total 500 Special Fund Balances
9,301.69
600 GPFund by "Fixed" & "Non Fixed" :
601 Salaries and Benefits
272.70
620 Facility Expenses
28.65
680 Operating Depart
59.06
681 Operating Depart
37.30
682 Operating Depart
44.88
Total 600 - Total General Fund for this year
442.59
Total Balances
$9,744.28
e> The Board has finance policies that determine that the above 600 Annual General Fund areas gets their discretionary income by order of importance --- or by priority. For example, fixed expenses like "601 - Salaries and Benefits", and "620 -Facility Expenses" are determined to get the first assignments of this discretionary General Fund income. Then the Board assigns the balance of such income according to their view of the most needed remaining 6xx Operating Depart General Fund areas.
f> We have a eFinFax Ministry accounting system that is structured along these lines so that the leaders of Ministry has weekly information like the above report that fundamentally answers the question: "Do I have money to spend in my area of responsibility?" Also please go to this WebBOOK mentioned above for more information on this topic.
Further application of this “Ministry Finance Internet Friendly” eFinFax accounting system is that a Ministry can use Online resources to electronically move their Bank and Credit Card ATF (After the Fact) transactions to their QuickBooks (QBs) software. This eFinFax system features also includes the following:
>> The overall ATF process allows you to process fewer manual transactions
>> It simplifies the Bank and Credit Card Reconciliation process and
>> You can leave unused sums longer in daily Interest Bearing Savings accounts
>> You go online each week and pay off your Credit Card or Plastic Balance.
>> Then, as indicated above, you electronically move all possible transactions to ---
>> Your QuickBooks (QBs) computerized accounting system which is set up so that
>> You have the weekly reports like above and you have the option of either viewing
Online or printing out hard copies
>> Which provides you with information that enables you to stay within your pre-approved
Spending Limits
>> Using Internet resources, you receive money that comes directly from the Payer’s bank
to your bank. This includes repetitive (or occasional) Donations plus Event registration
and receipts.
>> You go Online and pay as many of your bills as possible – or money electronically goes
from your bank and directly to their bank
>> You can arrange for the staff’s net pay to go electronically from your bank to their bank
account. This out-sourcing process may also file your payroll tax returns electronically.
>> You have a separate computerized “People” database where you maintain and process
Donation information. This could include electronically posting your deposit and
Special Fund and General Fund information into your QuickBooks (QBs) system, etc.
>> Remote staff/helpers (often trained volunteers) can be available via the Internet as you
arrange for them to help you either weekly and as needed, etc.Many of these eFinFax features can also apply to non QBs users.
For more details about this overall resource please digest the list of link contents found when you Go Here
I want to bring you up to date about our WebBOOKs. Much of the following is duplicated when you Click Here #4.
TO: eReaders RE: Free WebBOOKs Information ORIGINATED: October 2009
Available WebBOOKs and their Authors Month Completed
" FINANCES AT CHRISTIAN MINISTRIES" - by Jim Bramer November 2009
Retired Auditor - CPA"A JOURNEY TO BE CHRISTIAN MINISTRY
FINANCE INTERNET FRIENDLY'" - by Brad Pendable - CFO June 2010
Some thoughts about dealing with Co - Authored by September 2010
a Ministry's "MOST IMPORTANT Brad Pendable - CFO
FINANCIAL ISSUES --- MIFIs" and Jim Bramer
Retired Auditor - CPA==========================================================================================
Under Construction
==========================================================================================
DOES YOUR MINISTRY 'really' HAVE Co-Authored by
MONEY TO SPEND ? Brad Pendable - CFO
and Jim Bramer
Retired Auditor - CPATHE USE OF QUICKBOOKS (QBs) Authored by
AT A CHURCH Jim Bramer
Retired Auditor - CPASCHOOL ACCOUNTS RECEIVABLE MATTERS Co-Authored by
Brad Pendable - CFO
and Jim Bramer
Retired Auditor - CPARIGHTEOUS PERSONAL FINANCE
via the use of ONLINE TOOLs Authored by
Jim Bramer
Retired Auditor - CPA
- - - - - P E R S P E C T I V E of our e B O O K S - - - - -
Every "Christian Ministry" (often called a Christ Centered Entity or Endeavor) should be the very best steward of its financial resources. My personal goal is to help them adhere to Scriptural Truths found when you Go Here and do just that as they especially utilize the applicable "Online Tools" that are available via Computers and the Internet. CFO Brad Pendable and I are publishing these free WebBOOKs beginning in October 2009 --- we prefer to NOT call them "WebBOOKs" because they flow from our web sites and they are free.
One of the Internet tools is what is called "links", or hyper-link resources. They allow you to "link" to an Internet resource as you "click" and go immediately to the related topic within the Internet. For example, please notice these "Blue" "links" herein. A meaningful way to empower Christian Ministries to be the righteous stewards of financial resources for which they are responsible is for their people to have access to written or non verbal material; yea, “Book” like resources. Further, any user of "WebBOOKs" herein (we will reference such a person in the future as an eReader) will NOT have to pay money in order to use them --- like when you buy the usual hard copy book. There are no "copyright" features involved with any of our "WebBOOKs"; or the eReader can go to www.bcidot.org and not pay money as they do such things as the following:
1> Read the content of any of these free "WebBOOKs" directly from the Website itself so that our mutual objectives
are reached. Namely, we share our applicable experiences and/or thoughts in writing on that topic and the
eReader utilizes it to appropriately manage this area of their Ministry.
2> Or, as applicable, you, as the eReader, can move the contents of these "WebBOOK" pages (produced
using the “html” Internet facility) to a Document (like Word or PDF) on your computer where you can link to
Internet writings, or any other such resource, as you carry out perhaps your learning and/or tutorial objectives.
Please Go Here for some "copy and paste" instructions.Another significant Internet feature of these "WebBOOKs" is for the eReader to be able to use a "Search" process to locate the use of an applicable key word, or term. As you can imagine, this resource is a tremendous help in finding what you need, etc.
You will note that a number of these WebBOOKs are currently Under Construction. Please note that the content within the indicated Under Construction "Blue" links currently provide you with some preliminary, or foundational, information, etc.
Please let us know at Jim@bcidot.org or Brad@rpfin.org if you have some comments or need more information.
Click below for Potentially Helpful Online Links for you JIMs JRNL Readers: (1)
>> Seven reasons Churches should offer Electronic Giving Options -
>> Credit Card use at Churches can be Good, Bad or Just Plain Ugly
>> Mileage rates for 2011
>> Why Good Financial Accounting Is Essential to Good Ministry
Current "Ministry Finance" Truism (2)
Below is one of my Ministry Finance precepts/beliefs/principles, or "rules of thumb". Please go to 0069 for a complete TRUISMS list
"REPORTS - FINANCIAL -- Good financial reports are only as good as the people who understand and use them."
Prayerful
Thots (3):
Yesterday is a canceled check,
Tomorrow is a promissory note,
But today is the financial resources that you have. Be thankful !!
Are you wrinkled with care and worry? Get your faith lifted…
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 9708 9709 and 9710
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 | SPECIFIC SEARCH MATTERS 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: July 09, 2011
