Yearly Starting Balances

[dbrayboy]

Hi, I have posted the month of January for both contributions and fund accounting. It's the only month I have posted so for. I need to add funds to the Benevolent fund and the other fund we have designated as the Senior Flower Fund. These funds are set up as income accounts so I know I need to credit these accounts. But I'm not sure what account I need to debit. If I debit my checking account it will increase the balance and the monies for the aforementioned funds are already included in the balance. So can you tell me what the transaction would look like????

[NeilZ]

Hi, I have posted the month of January for both contributions and fund accounting. It's the only month I have posted so for. I need to add funds to the Benevolent fund and the other fund we have designated as the Senior Flower Fund. These funds are set up as income accounts so I know I need to credit these accounts. But I'm not sure what account I need to debit. If I debit my checking account it will increase the balance and the monies for the aforementioned funds are already included in the balance. So can you tell me what the transaction would look like????

Um ... the funds are in the checking account??

Are these accounts restricted income accounts or regular income accounts.

Restricted income accounts are used to hold income until the funds are needed to be released, they usually close to a restricted net asset account. Regular income closes to the unrestricted net asset accounts.

If you are taking in contributions for these areas in the Contributions Module, those Contribution Funds need to be pointing to the correct income account. It sounds like the contributions made went into the normal tithes & offerings.

Exactly what are you trying to show and why?? This would give us a better idea of what advice to give.

[dbrayboy]

Yes, the funds are in the checking account, however I didn't designated them when I set up power church. I want to make sure when I add the funds that it doesn't increase my starting checking account balance, because these funds are already apart of my total balance.

These funds will go into into our "benevolent" and "senior flower fund", which I have set up as "Donor Restricted, Temp. Restricted accounts. (01-4290 and 01-4295). Currently I have these accounts closing to a Unrestricted net asset account (01-3110). However, it appears that I need to change these accounts to close to a Restricted net asset account???? We are putting contributions into these accounts.

I am trying to determine what my transaction would look like. I want to add funds to my benevolent and senior flower fund without increasing my beginning balance in my checking account. Will it be something like this?

01-1110-000 Checking Account YSB Adjustment
01-4290-000 Benevolent YSB Adjustment

**I'm not sure which account would be debit or credit.

I'm sorry can you also explain the Restricted Net Asset Account, I've located the Unrestricted Net asset account and designated our income accounts to close there. However, I don't know what the number series is for the "Restricted Net Asset Account" or how to set it up.

[NeilZ]

Yes, the funds are in the checking account, however I didn't designated them when I set up power church. I want to make sure when I add the funds that it doesn't increase my starting checking account balance, because these funds are already apart of my total balance.

These funds will go into into our "benevolent" and "senior flower fund", which I have set up as "Donor Restricted, Temp. Restricted accounts. (01-4290 and 01-4295). Currently I have these accounts closing to a Unrestricted net asset account (01-3110). However, it appears that I need to change these accounts to close to a Restricted net asset account???? We are putting contributions into these accounts.

I am trying to determine what my transaction would look like. I want to add funds to my benevolent and senior flower fund without increasing my beginning balance in my checking account. Will it be something like this?

01-1110-000 Checking Account YSB Adjustment
01-4290-000 Benevolent YSB Adjustment

**I'm not sure which account would be debit or credit.

NOPE ... definitely NOT

I'm sorry can you also explain the Restricted Net Asset Account, I've located the Unrestricted Net asset account and designated our income accounts to close there. However, I don't know what the number series is for the "Restricted Net Asset Account" or how to set it up.

OK .. before I go any further answer me two questions:

1. It appears that you did NOT use the Maintain List of Donor Restrictions function in Funds Accounting to setup these restricted funds, right ??

2. Are there any funds in these accounts now ... I really hope there aren't any as it will make my answer much easier.

[dbrayboy]

1. The answer to your first question is no. I did not use the Maintain List of Donor Restriction function in Funds Accounting to setup these restricted funds. I set them up in the "Maintain Chart of Accounts" in Funds Accounting and Contributions.

2. In the two accounts that are in question only one of them have funds in it (benevolent) the other does not (senior flower fund).

Secondary issue that's related to the above.
As a matter of fact I have a total of 11 accounts that fall into this category and 7 of them have funds in it and 4 don't. I think the answer that you will provide for number two will affect all of my accounts. The only difference is the ones mentioned above I need to add funds to them.

Thanks for all of your help!

[NeilZ]

1. The answer to your first question is no. I did not use the Maintain List of Donor Restriction function in Funds Accounting to setup these restricted funds. I set them up in the "Maintain Chart of Accounts" in Funds Accounting and Contributions.

2. In the two accounts that are in question only one of them have funds in it (benevolent) the other does not (senior flower fund).

Secondary issue that's related to the above.
As a matter of fact I have a total of 11 accounts that fall into this category and 7 of them have funds in it and 4 don't. I think the answer that you will provide for number two will affect all of my accounts. The only difference is the ones mentioned above I need to add funds to them.

Thanks for all of your help!

OK ... after playing a bit with my test setup I have revised my original thoughts, and now see this as really easy. You'll have to do this with EVERY income account that you want to be restricted. Again, as I always suggest,do a backup of the accounting files before doing any suggested action.

1. First make sure that all the income accounts fall in the DONOR RESTRICTED, TEMPORARILY RESTRICTED range of the income accounts. The PCPlus accounting setup usually put these at the 4200 series of numbers, 4300 series are defaulted to Permanent Restricted accounts. You can change the number under the Chart of Accounts function, and the system will take care of the rest.

2. Enter the Maintain List of Donor Restrictions and click on ADD. The system will then lead you through setting up the restrictions. Go through the steps, at step 2 it will ask you to select the fund balance account (3200 level). If you don't have a Restricted Assets account setup, create one here. What I do is create one account for each restricted income account. Since you already have the income accounts setup, I would use a similar number here. If the income account is 4210, make the restricted fund balance account 3210.

At Step 3, you setup the income account, click on the Use Existing Account checkbox, and you'll be able to use the accounts you've already setup. Select that account here.

Step 4, you'll see to setup the RELEASE account. Powerchurch defaults these to the 4800 series of accounts. Here you'll have to create the account since you probably do not have this setup. Again, what I do is if the income is 4210, I use 4810 here.

Step 5 is optional. If you already have expense accounts that you use only with these fund you can select it here, or just bypass this. I didn't set any up, but I'm pretty sure (don't quote me) that if you setup an invoice using a designated expense account, the system will ask if you want to release funds.

Step 6 is again optional, but since you already have Contribution Funds setup for this, you can link that fund to this restriction.

3. Do this with every restricted account to set these up properly. Then whenever you have an expense you will be releasing funds on the invoice or manual check.

4. Now you need to move funds into that income account. Again, I'm going to assume that the contributions put the funds right into the normal "tithes and offerings" account, normally defaults to 4030-000, which I will use in my example.

Right now, I think that's enough for you to think about. I'll enter the transaction to move the funds tomorrow.

[NeilZ]

Its a very simple transaction .. the main thing is you do not touch the checking account.

There's no need, all these 'restricted' fund as well as the non-restricted funds all sit in the same checking account 01-1110-000. All you're doing is differentiating where the already accounted for income is to be placed as income.

So .. the transaction is this:

Since all 4000-000 level income accounts require you to CREDIT them to add funds, we're going to DEBIT other income accounts. Again, since I'm assuming that all the contributions were placed in the default 'tithes & offerings' account (4030-000) I'll be using that. I'm going to assume that you have a temporarily restricted income account at 4210-000, and a temp restricted fund balance (net assets) account at (3210-000).

01-4030-000 DB $200.00
01-4210-000 CR $200.00

This one transaction will move funds from the unrestricted income account (4030), and put it in the temp restricted account (4210). When you post, you'll that the system also updated the associated Unrestricted Net Assets account (3110-000) along with the Temp Restricted Net Assets account.

Do this for each temp fund you need to move funds into from the tithes & offerings.

Then make sure the Contributions Funds are pointing to the correct Income Accounts in Fund Accounting so this doesn't happen again.

[dbrayboy]

Thank you very much everything is in it's proper place. The last follow up question is on how to release funds. Should/Can funds be release before or after they have been posted? When I release funds, I need to use my 4000 series accounts right??

[NeilZ]

Thank you very much everything is in it's proper place. The last follow up question is on how to release funds. Should/Can funds be release before or after they have been posted? When I release funds, I need to use my 4000 series accounts right??

If you created everything as I advised using the Maintain List of Donor Restrictions, then you release funds as follows:

1. You create an invoice or manual check in Accounts Payable. You enter the normal checking account and an expense account for the ministry spending the funds.

2. You then click the button for Release Restricted Funds at the bottom of the window. A popup will appear listing all the Donor Restrictions you have setup. Select the restriction that you want to release funds from, click NEXT, enter the amount and any notes, then click Done. The system will then enter the release accounts using the information you selected when setting up the restriction.

You can release funds before they are posted in Funds Accounting, however any reports you run without those funds being posted, will show a negative amount.

[dbrayboy]

Can I also release funds from the "funds accounting enter transaction" section?

[NeilZ]

Can I also release funds from the "funds accounting enter transaction" section?

You can, but its best to release the funds as you create the invoice or manual check/EFT so its not forgotten.

FWIW .. the only time I use the 'Release Restricted Funds' button in a Funds Accounting transaction is when I have forgotten to release them in a invoice or manual check and do it after they were posted from AR, when I have to do it after the fact when the check has already been posted in Funds Accounting (easier than voiding and recreating the check), or I need to modify a payroll transaction to include funds that are in a restricted account to pay for the pastor's housing.

[dbrayboy]

Hi, how are you? Thanks for your help last year. I need your help again. I don't know why my year ending balances (2017) are not being carried forward to the new year (2018). This is happening to all of my 4200 series accounts. For example at the end of 2017 my donor restricted account 4290 had $1,264.54 in it and now for January 2018 the beginning balance shows $0.
However, I did noticed in the 3200 series that balances seem to be correct. I think we were suppose to complete some kind of year end transactions, but we fail to do that. We have already close out the month of December 2017 and I'm not sure how to correct the problem. We are on powerchurch plus 11.5 version.

Thanks, Dannie Brayboy

[NeilZ]

Hi, how are you? Thanks for your help last year. I need your help again. I don't know why my year ending balances (2017) are not being carried forward to the new year (2018). This is happening to all of my 4200 series accounts. For example at the end of 2017 my donor restricted account 4290 had $1,264.54 in it and now for January 2018 the beginning balance shows $0.
However, I did noticed in the 3200 series that balances seem to be correct. I think we were suppose to complete some kind of year end transactions, but we fail to do that. We have already close out the month of December 2017 and I'm not sure how to correct the problem. We are on powerchurch plus 11.5 version.

Thanks, Dannie Brayboy

Income accounts do not carry over, neither do expenses. These are tracked PER YEAR. Equity/Fund Balance accounts will maintain their balance totals from year to year.

[dbrayboy]

Thanks for your reply. So I will need to complete a transaction to add the balance, like I did last year. Is this correct??

Thanks, Dannie

[NeilZ]

Thanks for your reply. So I will need to complete a transaction to add the balance, like I did last year. Is this correct??

Thanks, Dannie

NO ... your income resets each year, as does your expenses. Income and expense is tracked PER YEAR, not cumulative.

DON'T enter anything. If you don't believe me, talk to a real accountant.