beginning balance for 2nd fund

[jonnav35]

I am just setting up PowerChurch and want to create 4 Funds. One is our general fund and the others are formerly just restricted accounts. I have two questions: 1. How do I set up the beginning balances for these accounts? In the set up, there is nowhere to enter this. I was going to use a transfer transaction but not sure how it will effect equity. 2. Since these funds are now separate, do I still set them up as restricted since they will show on their own reports and such?

Hope I made sense. Thanks in advance for your help. Spent days on trying to find an answer to these questions!

[NeilZ]

I am just setting up PowerChurch and want to create 4 Funds. One is our general fund and the others are formerly just restricted accounts. I have two questions: 1. How do I set up the beginning balances for these accounts? In the set up, there is nowhere to enter this. I was going to use a transfer transaction but not sure how it will effect equity. 2. Since these funds are now separate, do I still set them up as restricted since they will show on their own reports and such?

Hope I made sense. Thanks in advance for your help. Spent days on trying to find an answer to these questions!

Since this is a new install, the first thing you should do is decide why you want to take restricted accounts and make them funds? Will they have completely separate expense accounts? What is your reasoning?

Normally a separate accounting fund would be used to track something like MISSIONs, to provide more of a separation from Operations so that congregation members can see that the money going toward missions, is being expensed within Missions.

If the former restrictions were for something like only these funds will be spend to pay for youth expenses, then there's no need to create a separate fund, just create a Donor Restriction in the Operations/General fund.

One of the biggest mistakes new users of Powerchurch do is create too many accounting funds thinking that its a way to keep things separate, whereas creating the Donor Restrictions actually provides as much, if not better visibility for the funds.

Let me know your thinking, and then I can give you specifics.

[jonnav35]

Thank you for asking this because I have gone back and forth about whether to set a separate fund or not.

The three funds I am considering (aside from general) are memorials, equipping for ministry, and a fund that we plan to use for purchasing a building or renovating our current building in the future. We would like to see the balances for these each month. Memorials is for purchases that arware approved for things like chalices, Gospel books, etc.. Equipping may be pretty active, basically "grants" for parishioners to attend seminars, further education in ministry, etc... The last basically is just receiving funds now until future use.

I welcome your recommendations! Thank you.

[NeilZ]

Thank you for asking this because I have gone back and forth about whether to set a separate fund or not.

The three funds I am considering (aside from general) are memorials, equipping for ministry, and a fund that we plan to use for purchasing a building or renovating our current building in the future. We would like to see the balances for these each month. Memorials is for purchases that arware approved for things like chalices, Gospel books, etc.. Equipping may be pretty active, basically "grants" for parishioners to attend seminars, further education in ministry, etc... The last basically is just receiving funds now until future use.

I welcome your recommendations! Thank you.

OK ... I can see having building in its own fund. It will have expenses that you don't normally have in day to day operations. However, both the memorial, and equipping could be placed under the General fund using Donor Restrictions.

When you create the restriction, you would create a separate Restricted Fund Balance, a Restricted Income, and a Restricted Release account. You'd do this for the memorials and ministry accounts. The system will maintain the balance in those accounts, and you can verify it using the Cash Management Report.

When you then write checks to cover purchases and the funds would come from these restricted funds, you would RELEASE the amount from the restriction, and the system would properly adjust the balances.

Are you planning to use the same checking account ??

[jonnav35]

Yes, only one checking account.

I do understand the use of restricted accounts. I will take your advice amd swt up a separate fund for the building only. So I have a general understanding going forward, what guidelines do you follow in determining when to use a separate fund?

Also, can you please explain how to enter the opening balance of the 2nd fund? I have purchased the video support and they explain how to set up the fund but no where can I find out how to set up the initial balance.

You are so helpful!! Thanks again!

[NeilZ]

Yes, only one checking account.

I do understand the use of restricted accounts. I will take your advice amd swt up a separate fund for the building only. So I have a general understanding going forward, what guidelines do you follow in determining when to use a separate fund?

These are my personal guidelines, so use them if you wish:

The fund is specfic: such as a building or capital improvement fund where there is no overlap with operations. Operations covers day to day maintenance, building covers major repairs/replacement or new construction.

I have a separate fund for Missions, to track mission income from contributions, and other fundraisers; then tracking it as it is sent to support missions locally, or abroad. This provides broad visibility.

I have a separate fund for endowments, where we track our investments. This keeps this completely separate from other funds so the congregation does not get the idea we have more assets in our operating then we actually do.

However, I have a restricted fund for memorials in operations, as purchases here can be for any ministry of the church.

Also, can you please explain how to enter the opening balance of the 2nd fund? I have purchased the video support and they explain how to set up the fund but no where can I find out how to set up the initial balance.

You are so helpful!! Thanks again!

I actually answered a similar question last year, while the exact issue is not the same, the manner of moving funds is:

https://www.powerchurch.com/forum/viewt ... =3&t=12019

Please note the reminder there about doing a backup before you proceed with moving funds.

In your case, do the 01 - Operations fund setup first and get those accounts setup using the beginning balances as the system suggests from your current check register and other source documents. Then once that is up and correct, backup the accounting files, and create the second building fund with all the proper accounts you'll need.

Basically you can copy what you need from Operations fund for the checking, and unrestricted net assets, and contributions income. Those are standard accounts, they usually default to 1110-000 - Checking, 3110-000 - Unrestricted Net Assets, 4110-000 - Contributions income. Copy the "GROUP" accounts as they provide the 'outline' for the accounting system. You can add expense accounts later as you find you need them. Once you're satisfied, then do another accounting backup.

Now move the funds, and run reports to make sure everything is correct, if not figure what went wrong, then restore from the last accounting backup. Now try again

[jonnav35]

Wonderful! One last question, I apologize for so many!

If the building money was in the general fund, it would be restricted. When you set it up as a separate fund, do you still use the restriction accounts or no, because it is already in it's own fund, therefore showing the funds as only for building?

[NeilZ]

Wonderful! One last question, I apologize for so many!

If the building money was in the general fund, it would be restricted. When you set it up as a separate fund, do you still use the restriction accounts or no, because it is already in it's own fund, therefore showing the funds as only for building?

No restrictions needed.