Separate funds

[reballdad]

I need help understanding how funds work. A little background on how our church is set up.

We have 5 checking accounts and 1 savings account. The 2 major checking accounts are the general fund and designated funds. The designated funds checking account handles the money for approximately 10 different funds ex: building fund, missions, adult ministry, etc.

I have set up so far 01 General Fund. I then set up the designated funds as temporary restricted funds. If I keep it this way everything will print out on 1 Balance Sheet and P&L, correct? Should I set up separate funds for each of the designated funds? If I do, during the Accounting Setup can more than the 01 General Fund be set up. Or do I only include the General Fund information and then after the Accounting Setup is finished, manually set up each individual fund with their balances?

Thank you for your help in this confusing matter.

[Dish-Man]

I have the same exact situation and would welcome any suggestions. We have ONE checking account for our Designated funds that people give to and the money is disbursed out later (Youth fund that people contribute to pay for youth trips, etc) (Missions Fund that people contribute to for International Missions and then a check is written out of a couple of months later) I believe the way I'm doing it is too complicated now and would welcome any input. Here's a start. Since it's a separate fund and separate checking account from the operating account, I've called it Fund 02 (Designated Fund). I have separate asset accounts for Youth Fund, Sr Adult Fund, Missions Fund, etc. I also have an Income account for each account and expense account for each account (Youth Income, Youth Expenses) to account for the total spent each month, or income received for the month. My transactions look like this for a $100.00 Gift to the Youth Fund:

DB 02-1210-202 Youth Fund Assets $100.00
CR 02-4220-202 Youth Fund Income $100.00

If we spent $100.00 for a Youth event, it would look like this:

CR 02-1210-202 Youth Fund Assets $100.00
DB 02-5220-202 Youth Fund Expense $100.00

My problem is how do I make my Fund 02 balance match up what the bank says I have when I get my statements? I know if I add up all the "Asset" accounts in Fund 02, it will match, but I would like to see it in a report without having to pull out the calculator. We have the same situation in another account called 03 Maintenance which houses a fund for Maintenance Repairs, the receipts of our building fund drive, and an account that holds money for capital expenses.

[Jeff]

There really is a couple of different ways to handle these sub-groups or donor restrictions. First when we are talking about funds in accounting it means something very specific. An accounting fund is a self balancing set of accounts. What that means is each accounting fund contains its own assets, liability, equity, income & expense accounts. By setting up a separate fund you can run a separate balance sheet, income & expense, etc for each area.

Version 9 also adds a new way of handling donor restrictions that doesn't require a complete fund for each balance you need to track. For more information look at the paper called "Accounting for Contributions" on your version 9 CD, it can also be found on our website here: http://www.powerchurch.com/support/answ ... icle_id=58

You may end up using both funds and donor restricted equity accounts in your books depending on the reporting needed for that particular balance. For example you may have a women's group that needs to see a separate income & expense & balance sheet for their balances. You would set them up a separate fund. While you have another donor restriction like a memorial that you don't need that level of reporting so you set them up as a donor restriction in a generic donor restricted fund. Or even inside of the women's group fund you could use donor resticted equity accounts to keep track of balances that they have that are to be used for specific items.

I hope I havn't made you more confused. Maybe Matt or Randy can jump in with more examples of explanations where needed.

during the Accounting Setup can more than the 01 General Fund be set up. Or do I only include the General Fund information and then after the Accounting Setup is finished, manually set up each individual fund with their balances?

The accounting setup assistant in version 9 only sets up your 01 fund. If you want to setup additional funds you can either:

1. Enter amounts for only your general fund during the accounting setup, and then setup additional funds and enter their beginning balances with journal entries.

- or -

2. Enter the balances for all your funds during the setup PC+ will put all the money in fund 01. You can then do journal transactions to move balance to your new funds once you have them setup.

[Jeff]

Dish-Man

The method you are using to keep track of your restricted totals we call "sub-accounting the bank" It will still work in version 9, but we are not recomending it as much as we used to because of the new features we have added. If you are happy with your current reporting and processing I wouldn't change. More information on this method can be found here:
http://www.powerchurch.com/support/answ ... icle_id=21

My problem is how do I make my Fund 02 balance match up what the bank says I have when I get my statements? I know if I add up all the "Asset" accounts in Fund 02, it will match, but I would like to see it in a report without having to pull out the calculator.

It sounds like you might just need to add a group account to group together all your sub-accounts. For example if your chart of accounts looked like this:

02-1210-000 Group Level 4 Desinated Checking
02-1210-202 Detail Level 5 Youth Fund Assets
02-1210-204 Detail Level 5 Another Fund Assets
02-1210-206 Detail Level 5 Yet Another Assets
02-1220-000 Detail Level 4 A different bank account

When you ran your balance sheet it would look like this:

Code: Select all

Designated Checking
  Youth Fund Assets             1,123.55
  Another Fund Assets             333.22
  Yet Another Assets            5,012.11
                               ---------
  Sub-total Designated Checking 6,468.88

A Different Bank Account       10,000.00

By creating a group above all those sub-accounts you should be able to get a sub-total that will give you the amount in the designated checking account.