User Support Forum

I need to stop reading and just roll up my sleeves and get to work. I’ve read so much (too much?) that it’s all a blur now. I am certainly no accountant, although I’ve picked up the very basic principles over time. We will be going live on PC 11.1 after looking at it for awhile now.

At this point I’d like some general guidelines on designing our COA. Below is a rough description of how we’ve been operating.

We have one savings account and one checking account. All receipts are deposited into savings and transfers are made to checking as checks are cut.

We have what we have always called General Fund, Designated Funds, and Restricted Funds. The General Fund is our budgeted fund. The designated and restricted are really all temp restricted accounts. The only difference is that designated is more long-term (not permanent) than restricted.

Like many other churches, we have all kinds of temp restricted items. These include reimbursements to the church (study books, etc.), love offerings, pass through items, contributions for specific budget items, building use fees and deposits (that may be reimbursed as for weddings), etc. And sometimes, we have to transfer money from GF to these restricted items, or from restricted to GF. Some of these restricted items will have balances that roll over from year to year.

The congregation is accustomed to seeing, for all three types, beginning balance, receipts, expenses, and ending balance on its monthly reports, as well as the GF income/expense report against the budget. The Finance Committee would also like to see how much the church spent per budget item with how much was contributed for specific budget items (not too many of these items).

So, we have at least two accounting funds – General and Restricted. Or three, if our “designated” and “restricted” should be in two separate funds. From all the reading I’ve done, it appears there’s a couple of options for handling all these restricted items: each as their own account set (income, expense, equity) or with donor restrictions/releases (we will be using the Contribution module).

Generally, what is a “clean” way of setting up our COA so that all these items are tracked without using journal entries unless necessary?

A donor restriction may be a little tedious for what you are trying to do.

A donor restriction *most of the time* should only be used when a donor gives a contribution and asks that it be for certain thing.

It sounds like the church is purposely restricting certain money be set aside for certain things, not the donors.

Therefore, if you use a separate fund, like you have set up, for the things that the "church" restricts, you can provide an income and expense report that will track all of the activity that you wish to report on, without the added steps of donor restrictions.

Aha! Thanks, that's an interesting distinction that I hadn't considered. And yes, from what I had read donor restrictions did seem like overkill.

So, am I thinking right? Two funds (or three) using an account set for all these items (income, expense, equity)? In looking over these, some of them are really duplicates of budget items, like VBS. I could streamline these if there's a good way to handle monies that are given to be used specifically for a budget item without cluttering up the income/expense statement.

I ask about all these detail equity accounts because I've seen different thoughts about them. One of the "Tales from the Tech" articles about donor restrictions says each restriction will have its own equity account. But I think I've also seen it recommended here in the forum somewhere NOT to have detail equity accounts.

Each donor restriction should have its own detail equity account.

JohnDMeyers wrote:Each donor restriction should have its own detail equity account.

That wasn't really what I was asking, but thanks though.