Setting up a New Fund

[donanaliza]

I am not good at accounting, although I've had some in college. I need to know how to set up a new fund with a beginning balance, and also how to transfer money out of the Gen. Fund into this new fund. Can you give me step by step?

Thanks, Sherry

[Randy B]

I would establish a spreadsheet with the balances you want in the general fund and what you want in your new fund. The total of these two would equal your general fund right now. This will tell you what you need to transfer. Run a balance sheet and income statement before you proceed so you can check your totals.

Then I would name the fund in PowerChurch and then establish the chart of accounts for the new fund. You need to do this before you transfer any money.

Third I assuming your new fund will have cash that will equal the fund balance. If that is true, I would just make a journal entry to debit new fund cash and credit general fund cash. I would also make an entry to debit general fund fund balance and then credit new fund fund balance.

Fourth, post your entry and then run a balance sheet and income statement. The totals should not change and you can compare to the ones I reference in the first paragraph. This should get you where you want to be.

[donanaliza]

Thanks Randy for replying to my question. I know how much I want to transfer from my Gen. fund into my new fund. The book says I have to have a starting fund balance. Do I do that first and how do I enter that? Then, how do I transfer my money from Gen. fund to the new fund. I tried doing it the way you said, but it gives me a minus amount on my funds report. I'm really trying to learn this without much experience in accounting. I can do the Contributions and enter my deposits and do manual checks OK, but our Church is entering a new phase and we need to set up a building fund so we can track the money spent at all times, and I'm stuck. I already have my chart of accounts set up for a building fund. I just pretty much need to have someone tell me the transactions from beginning to end. I have read the manual, but I don't understand. If you don't feel you want to go to that much trouble, I understand completely. Thanks for any help! Sherry

[Matt]

Sherry,

Please see my post to the second post you submitted today. I think this will answer your questions.

Matt

[Randy B]

Sherry:

If you see Matt's post it should accomplish what you want. After that one or two entries if you want, your fund balance in your building fund would equal the cash you have transferred on your balance sheet. To get a little into accounting, your cash (an asset) has a debit balance and your fund balance (equity) would have a credit balance. Your general fund would still be in balance the the fund balance and cash in your general fund would be lower by what you transferred into your building fund.

I am unclear as to what you mean by getting minuses on your funds report but you may have to undo what you previously did.

Essentially you want to make the following entry as Matt described

Debit Building Fund Cash - This increases it
Credit General Fund Cash - This lowers general fund cash
Debit General Fund Fund Balance - This lowers it
Credit Building Fund Fund Balance - This increases it

This one or two entries as you please should balance out and establish the beginning cash and fund balance in your building fund.