Tales From Tech 2 - Issue: 17

On September 11, 2001, the United States and the World were shaken by acts of terrorism.

Since these attacks, we have all seen and heard remarkable stories of heroism which reaffirm that America is indeed the home of the brave. It is my sincerest hope that we never forget the acts of compassion and bravery that we have witnessed.

It is also my hope that we will all continue to strive to find ways of showing the world that we are indeed "one nation, under God." After all, it is not just by the stories we see on TV that heroism and patriotism can be measured. It can be measured by the flag you display, the blood you give, or the lives you touch.

I started thinking the other day about ways we might all be able to help and I think that first and foremost, it is important that we continue giving.

In my opinion, one of the easiest ways to give is to simply have an amount deducted from your payroll check. If you're like me, it's easier to give it before you get it. Then, at some future date, the church can give the money that's been collected to an organization that will benefit those affected by the September 11th tragedy. (For a list of organizations providing help, just go to http://www.libertyunites.org.)

Today's newsletter is going to be about how you can set these deductions up in Payroll. I'm going to explain how to add a deduction item to payroll that can then be added to an individual's check to automatically deduct an amount from their check.

Of course, if you are the one setting all of this up, discuss this with the pastor and your fellow employees to see if this might be appropriate for you and your staff.

DEDUCTION DUCTION, HOW'S THAT FUNCTION?

In order to take some amount of money from an employee's check, you will first need to add a new deduction item in Payroll.

To do this, simply bring up the Maintain Item Descriptions screen under Payroll and click on the Add button.

The number and description are entirely up to you. The item type would be "deduction" which simply means that it is something that reduces the check amount. Since each individual person that chooses to give will probably just want to deduct a flat dollar amount, you will just leave the tax table as "none."

The next items on this screen are for the default debit and credit accounts that you want this money to affect. The debit would be to the checking account and the credit, like many deductions, would be to a liability account. Which liability you want to use is between you and whoever set up the Chart of Accounts within the program. You may even want to add a new liability account to your Chart of Accounts.

The liability account you use will accumulate the money until the church writes a check to whatever organization the money is to go to. (By the way, in case you're wondering, when the church goes to write this check, you would just credit the bank and debit the liability account the money has been accruing in.)

After you have created the item, the only other thing that you have to do is to bring up the Maintain Employee Pay Items screen and add this new item to the records of the employees that have chosen to contribute.

To add the item, just bring up the Maintain Employee Pay Items screen, locate the employee's record, click the Add button, type in the item number, the amount the employee wants to give and then click on the Save button.

Once the employee decides that they no longer want the amount deducted from their check, all you have to do is to bring up the Maintain Employee Pay Items screen again and then delete this deduction item from their record.

By the way, for tax purposes, what most churches would do in situations like these would be to give the contributor (in this case, the employee) a letter thanking them for their gift.

ELEMENTARY, MY DEAR, TWO TIMES CASH IS MORE

Something else that you might want to consider would be to discuss with the pastor whether the church would want to match the amounts each employee is giving.

If they want to do that, you would simply add another payroll item for those amounts. That item would be an "employer's liability" item and it would debit an expense (because this would be money the church is giving) and credit the same liability the deduction item is crediting. Then you would also add this item to any employee records that the church is going to match the gifts for.

Since this item would be an "employer's liability" item on the payroll check, it would not actually affect the check amount.

IN CLOSING

Before you make any changes to the Employee Pay Items and then process a payroll, I would strongly recommend making an Accounting backup, just in case.