Unrestricted but Reserved Accounts

[NeilZ]

Just a quick note ... if your contribution to the contingency fund is a standard percentage, say 10% of all weekly contribution, you can setup in the Contributions Module an automatic transfer to this special account, and you wouldn't have to worry about remembering to do it yourself.

[debbieg]

John, I was wondering about the levels of the accounts. I wasn't following anything you typed, but just following after what was already in my COA. It looks like the system already had the following at startup:
1. ASSETS
2. BANK ACCOUNTS
3. CHECKING ACCOUNTS
3. SAVINGS ACCOUNTS

I added the lower level specific accounts that we have at our banks. Not sure why I used level 5.....probably to get to a detail level. ??? Would it screw anything up if the checking accounts are level 5 but the savings account is changed to a level 4 so that it can have lower levels underneath it?

[JohnDMeyers]

It doesn't do any harm, however, your reports indent numbers based on the level assigned to them.

I like to have all my account balances at the same indent level on my reports for ease of reading them on reports, that's all.

It's hard to demonstrate here, but it looks like this on reports.

level 1
---level 2
------level 3
----------level 4
------------level 5
---------------level 6

Over time, I just started using level 4 and level 6 a lot. Our consolidated reports (funds 01 - 30) work well when a consistent application of indents are applied across funds. For that reason, I stick mainly with level 4 and level 6.

I'm not telling you to switch to level 4 and level 6, I am just trying to give an answer by using my situation as an example. You can substitute in your level numbers and it will work just as well.

I wish this forum had a place to post pdf files. I could show you a print out of my chart of accounts.

[debbieg]

John, I understand exactly what you mean about levels. I'm a very structured person and spent a lot of time in the expense accounts to make the levels come out right. I went back and looked at the COA example I had before customizing. It does show a "gap" from the 3 level to the 5 level and I just followed that example in the Assets. I'm guessing that it is because in other areas there are moe levels and the detail level tends to be level 5 or 6.
You're right....this is too hard to explain with words. I'll send you a PM with address that you can send PDF to.
Thanks,
Debbie

[financialassistant]

Debbie:

You are on the right track.

I see you indicated that your new accounts are level 6. If that is only because I used level 6 in my example, you may want to make them level 5 to stay consistent with your own convention.

The only new piece of information that I will throw into the mix is this. You can go into the Chart of Accounts and tell PowerChurch to include your asset accounts in the Cash Management report. You have to go to each account in the Chart of Accounts and include each one individually. I don't use this report on a regular basis, so I am not sure it will give you any useful information, but it may. When you run the report, uncheck the box about Accounts Payable open items. That definitely doesn't need to be on the report.

Otherwise, the account activity report will give you the information you are looking for.

John (or anyone else),

I'm in a similar boat as Debbie, but with a new twist. I really like the sub-account of savings idea. The board has set aside $350 a month in the budget to add to the reserve, and they want to see it on the budget report each month (so they know it is being transfered) and the Cash Management Report (to see the overall balance, separate from designated categories listed). This is what I'm picturing...

CR Checking (because it is electronically transfered)
DB Expense (to show up on budget report)
DB Reserve sub-account of Savings (to show up on CMR)
CR ???

Any help? I'd really appreciate it!
Aletha

[JohnDMeyers]

CR Checking (because it is electronically transfered)
DB Expense (to show up on budget report)
DB Reserve sub-account of Savings (to show up on CMR)
CR ???

It will be hard to make this work, because your accounting system works best when it mimics the real world situation.

In this case, the money is not leaving your organization. It is being transferred from checking to savings. If you show an expense for the transfer, when you transfer it back, and actually spend it, you will have to show a second expense. It will look like you are spending the money twice.

You can budget on your asset accounts after version 9, I believe. Why not do this:
CR Checking (because it is electronically transfered)
DB Reserve sub-account of Savings (to show up on CMR)

and put a budget amount on your savings account.

[Jeff]

I am not sure if you have more than one fund. I would think about moving non-operating money out of my general fund to keep it separate. In your example I might have a Fund 09 as a reserve fund. The accounting transaction to move the money from fund 01 -General to Fund 09 - Reserve would be:

Credit 01 - Checking
Debit 01 - Transfer
Credit 09 - Transfer
Debit 09 - Savings

Transfer accounts show on the income and expense statement and can be budgeted. So fund 01 can show a budgeted amount for the transfer to the reserve fund. The total expenses of the church are not overstated as the transfer is shown separate from the expense section.

The income and expense report would look like this:

INCOME
...
TOTAL INCOME

EXPENSES
...
TOTAL EXPENSES

TRANSFERS
...
TOTAL TRANSFERS

NET INCOME

[financialassistant]

I am not sure if you have more than one fund. I would think about moving non-operating money out of my general fund to keep it separate. In your example I might have a Fund 09 as a reserve fund. The accounting transaction to move the money from fund 01 -General to Fund 09 - Reserve would be:

Credit 01 - Checking
Debit 01 - Transfer
Credit 09 - Transfer
Debit 09 - Savings

Transfer accounts show on the income and expense statement and can be budgeted. So fund 01 can show a budgeted amount for the transfer to the reserve fund. The total expenses of the church are not overstated as the transfer is shown separate from the expense section.

The income and expense report would look like this:

INCOME
...
TOTAL INCOME

EXPENSES
...
TOTAL EXPENSES

TRANSFERS
...
TOTAL TRANSFERS

NET INCOME

Hi Jeff,
This worked great until I ran the Cash Management Report. Now I have Fund 1 Checking and Savings and Fund 2 Reserve. In other words, the transfered balance/Reserve is showing up in both the Fund 1 Savings and Fund 2, so my actual assets are showing too high. What did I miss?

Thanks,
Aletha

[financialassistant]

Here is how I tried to "fix" it:

Reversed the transfer transaction.
New transaction:
CR fund 1 - checking
DB fund 1 - transfer to other fund
DB fund 2 - savings sub-account "Reserve" (added this)
CR fund 2 - transfer from other fund

Now I I don't have the amount transfered/balance of reserve showing up twice, but I'm not sure how I'm going to reconcile this when the bank statement comes...

Second, related issue: there is interest earned from this savings account and I am supposed to put it with the Reserve. If I do that, won't it mess with the budgeted fund 1 "transfer to other fund amount"? The income is not budgeted for/counted on right now, yet it does show up on the report since I've entered it originally as DB savings/CR interest income. If I do this...

CR fund 1 - savings
DB fund 1 - transfer to other fund
DB fund 2 - savings sub-account "Reserve"
CR fund 2 - transfer from other fund

... then the interest will show itself twice on the budget report (once in income, then in transfer). Maybe I've been staring at this too long to think clearly! Ugh.

Aletha

[JohnDMeyers]

The Cash Management report is kind of a tricky bird to work with.

If you include assets and liabilities, it is somewhat of a "net worth" report.

If you exclude assets and liabilities, it is somewhat of a "cash-on-hand" report.

All that to say that if you are trying to optimize for the Cash Management Report, you may get frustrated.

You would be better off to optimize for the budget report, I think. It's a little hard to follow all the movement of money that you have created.