Initial Setup Questions

[newsboy9]

Hello Everyone, I just got elected treasurer and I'm going to be setting up PC from scratch. The church has used PC in the past but only the contributions module. We have PC 11.1.

I've got the way I think I want to set it up and I wanted to run it by everyone to see what the pros and cons of my setup would be. I need detailed reporting for General Fund, Missions, Youth, Children's and Women's Ministries as well as the Building Fund. All of these are very active ministries and need to know the details of their accounts at any time.

I want to setup all Ministries as separate funds, I know this will increase my work load as far as transferring money between funds and having more overall accounts but I think the trade-off is worth it.

So here's my thinking.

01 - General Fund
General accounts to keep track of all operating income and expenses and transfer accounts to and from all other funds.
02 - Missions Fund
Transfer accounts to and from General Fund.
Income Accounts from Contributions
Expense accounts to Missions Organization(s)
03 - Children's Fund
Transfer Accounts to and from General Fund.
Income and Expense accounts for General, Camp, Convention, Speed the Light (Youth Missions).
04 - Youth Fund
Transfer Accounts to and from General Fund.
Income and Expense accounts for General, Camp, Convention, BGMC (Children's Missions).
05 - Women's Fund
Transfer Accounts to and from General Fund.
Income and Expense Accounts for General and whatever the WM leader decides
06 - Building Fund
Transfer Accounts to and from General Fund.
In the raising money phase so for now just General Income and Expense Accounts.

So is this going to be difficult to keep track of and will this give me the level of reporting I'm hoping for? At this point we have no interest in keeping track of our physical assets and we have no debt. Most of our money is designated for each of these areas at the time it is given so will be put into the appropriate funds straight from the Contributions Module. Same checking account for everyone. I'm new enough that I'm sure I don't even know the right questions to ask.

Thanks in advance for any comments and suggestions.

Luke

[newsboy9]

Should I have been more specific with my questions?

Here's another one, should I setup camp fees, which go to another non-profit as a pass through fund or a liability?

Thanks,

Luke

[JohnDMeyers]

First of all, most of the questions like this get more attention in the Accounting section of this forum. I just happened to look here tonight, but I don't often check here. Contribution questions get more attention in the Contribution forum, too. Just thought I would pass that along.

Setting up a Missions Fund is typical because of the relatively large number of income and expense accounts. The other ministries may have a half-dozen income and expense accounts, and can go either way. I have those in my General Fund, and with proper levels and GROUPS in the chart of accounts, it's easy to read.

If you are using the Contribution module to record your offerings, then you don't have to do much transferring between funds. Contributions will put the money in the correct fund.

For example, if you take in $1,000 in contributions and want $100 to go to the Missions Fund and $900 to go to the General Fund, you can set up the Contribution Funds like this:

In Contributions / Setup / Maintain List of Contribution Funds
Fund 100 General Tithes
DB 01-1110-000 checking
CR 01-4010-000 General tithe income

Fund 101 Auto-missions
DB 02-1110-000 checking
CR 02-4020-000 Missions tithe
[this fund receives 10% of Fund 100]

Then, when you enter $1000 in Contribution Fund 100, 10% automatically gets put in Missions Fund 02. (sorry about the word "Fund". It has two meanings, in this case)

Concerning the pass-through question.

The proper way to take in money that is destined for another non-profit is called a "pass-through" contribution, and it involves a liability account. So you were right on both counts.

In Fund Accounting / Setup / Maintain Chart of Accounts, create 01-2120-000 Camp Fee liability

In the Contribution module, create this:
Fund 201 Camp Fee
DB 01-1110-000 checking
CR 01-2120-000 Camp Fee liability

If you take in $100, and want to cut a check to the camp, in Accounts Payable, create a "Camp" Vendor in Accounts Payable / Setup / Maintain Vendor Records

Then enter this invoice in Accounts Payable / Maintain Open Invoices:
Vendor: Camp
Reference: Camp Fee
Amt: $100
CR 01-1110-000 checking $100
DB 01-2120-000 Camp Fee liability $100

You'll get the hang of things pretty quickly.

[JohnDMeyers]

You say you don't want to keep track of your physical assets, but you should enter your checking account balance. If you didn't do that when you went through the setup wizard, you can do it like this:

Enter beginning balance of $1,300.00 in checking:
Fund Accounting / Enter Transactions:
DB 01-1110-000 checking $1,300.00
CR 01-3110-000 unrestricted net assets $1,300.00

Likewise, to enter your building value of $120,000:
Fund Accounting / Enter Transactions:
DB 01-1810-000 building $120,000.00
CR 01-3110-000 unrestricted net assets $120,000.00

After that, things kind of take care of themselves.

[newsboy9]

Thanks so much for your response it really helps, especially the pass-thru account and how to set that up. I've been playing around setting up mock accounts and doing mock transactions. I've successfully made contributions that go to the accounts in different funds, transferred money between funds and written checks from different funds. I think the reason I like setting up the different ministries in different funds is because I love how the Balance Sheet by Fund report is laid out it gives me a great overview of where we currently stand. I think it's something I can show to the pastor and board and they can quickly understand where we're at.

Our Missions probably has the least amount of activity and accounts of all of our ministries because our denomination keeps track of all of our missionaries US and Foreign. We send them one check for US and another for Foreign and they send the money to the different missionaries. So would I setup pass-thru accounts in my General fund to handle this instead of having it in a different fund? That way I won't have a fund that only has a liability account (well and the accounts that have to be created with that).

Do you think I'm ready to go through the setup for real and begin using the program? I want to go back and put in all our information from Jan 1 so it will be a complete years worth of data at the end of the year.

Since my question was both accounting and contribution I wasn't sure which area I should put it in. I won't make that mistake again, thanks for checking this and answering.

[JohnDMeyers]

It will be easier to setup the missions pass-thru in the General Fund, if that is the only major activity for missions.

If you have played around with making transactions and contributions, you're probably ready to go live.

We're always here to help!

[newsboy9]

If I configure my test setup just how I want it, can I use the Restart Accounting function to get rid of all transactions that I've used for testing purposes? In other words keep all accounts and people but get start over with real balances and no transactions or contributions.

Thanks again,

Luke

[JohnDMeyers]

You will Reset all of Fund Accounting, but keep the Chart of Accounts as modified.

You will keep all of your Contributors and Contributions.

You can go into Contributions and Delete Old Data, which will then allow you to delete any Contribution Funds that you may have entered contributions into, and you can also delete the Contributors.

or - you could just reinstall PowerChurch and start from scratch.

[newsboy9]

Ok if I setup my missions as a pass-thru account should I check the box that says This account can use donor restricted money? I think I should because when people say it's for missions it's restricting the money for that purpose. If I check that box what other things do I need to to in order for it to be setup correctly?

Thanks again,

Luke

[JohnDMeyers]

By matter of course, I give all my assets and liability accounts the ability to accept donor restricted money, because it is the rare exception when you want it to NEVER do so.

If you encounter a rare exception, you can uncheck that box.

Income accounts are a little easier to determine. If they close to an unrestricted equity account, you want them to NOT accept restricted money.

[newsboy9]

Ok that makes sense, just wanted to make sure.

Luke