Restricted funds and expenses

[ehopper]

Hi! Is there any way to see the specific expense accounts which were used when releasing restricted funds? For example, the "Detail changes in Equity" report shows all the transactions that posted to the "restricted income" P&L account, and then all the transactions that posted to the "released from restriction" account, but we do not know the actual expense accounts used in that release (unless you look up the check reference 1 by 1 which is not practical or worth it!).

After taking the time to finally understand the restricted funds function, our board wants to be able to see movements in restricted funds in an income statement format. I'm afraid the only way to do this is to create a new Accounting Fund for each designated revenue stream. Help?

[JohnDMeyers]

First, restrictions only apply to income. You won't find any built-in function in PowerChurch that will include an expense account with respect to restrictions, because expense accounts are not restricted.

To track expense accounts associated with restricted income (which is what you are asking about), you have to set it up yourself.

The easiest way is to use sub-accounts.

When you set up a restriction, there are always three unique accounts. Two are income and one is equity. Assign them a unique sub-account, as well, like this:
01-3210-101 camp restriction
01-4210-101 camp income [closes-to 3210-101]
01-4810-101 camp income release [closes to 3210-101]

01-3212-102 building restriction
01-4212-102 building income [closes-to 3212-102]
01-4812-102 building income release [closes-to 3212-102]


Then, if you know certain expense accounts will be used when payments are made, assign them the same sub-account number as the restriction. Note that this does not "restrict" the expense account. i.e. the expense account closes to 3110-000.

01-5342-101 camp payment [closes-to 01-3110-000]

01-5639-102 building plumbing [closes-to 01-3110-000]
01-5720-102 building permit fee [closes-to 01-3110-000]
01-5879-102 building carpet [closes-to 01-3110-000]

Now, you can run many different reports that sort by sub-account, such as Income and Expense, and only look one restriction at-a-time.

Income and Expense
Fund 01 to 01
Sub-account 102 to 102

Will show you:
01-4212-102
01-4812-102
01-5639-102
01-5720-102
01-5879-102

all on one report.

[ehopper]

Thank you so much for this! You can see things are moving slowly here as we are trying to revamp our chart of accounts to use PC more effectively. Is there any connection between designated funds in the Contribution module and where they get posted in Accounting?

For example, in my general fund 01, I have donor restricted building income account 01-4280-201. Here we track any money given towards our mortgage or building improvements. Going forward, we want to more closely monitor that the money is used for the right cause and I think the restricted income function will help me maintain the balances accurately. Should I create two separate income accounts with the related restricted income set-up? Also, how does this connect with the Contribution module? Do I create one contribution fund "Building 201" and add a designations "mortgage" and "building"? Or do I create two different funds: Building Mortgage 201, Building Other 202 and assign them FUND TYPE: BUILDING? I'm so confused!

I would love to automate the process as much as possible such that when a contribution is entered, it goes to the right income account and then can its used can be track it via releasing restricted funds. My goal is to be able to provide a quick answer when the pastor asks how much was raised for building improvements and how much is left!

I'm so thankful this forum exists!

[JohnDMeyers]

I would create two restrictions. One for mortgage and one for building, and a Contribution fund for each:

01-3210-101 mortgage restriction
01-4210-101 mortgage gifts [closes-to 3210-101]
01-4810-101 mortgage release release [closes to 3210-101]

Contribution Fund 210
DB 01-1110-000 checking
CR 01-4210-101 mortgage gifts

---------

01-3212-102 building restriction
01-4212-102 building gifts [closes-to 3212-102]
01-4812-102 building release release [closes to 3212-102]

Contribution Fund 212
DB 01-1110-000 checking
CR 01-4212-102 building gifts

-------

If you haven't used any of these account numbers, yet, then I suggest you use the Restriction Wizard to create them. It will give the restriction a name, and allow you to use the RELEASE button in Accounts Payable to locate the release accounts easily.

Anytime you spend money against the restricted income, make sure you release it from the restriction.

A Balance Sheet report will always show you how much is left in the restriction.
It is the amount in the equity account for that restriction.
01-3210-101
01-3212-102