New checking/accounts at new bank

[treasurerawc]

I am new to this forum; our church uses PowerChurch10 and I have been treasurer for 2 years but we don't use the program to its full capability; financially, church business is getting a little more complicated and I wanted to try and keep up with everything, properly, on the program.

Our church wants to close our current checking account at Bank A and open new accounts with that money at Bank B (checking/savings/building fund). What do you debit and credit for the new accounts?

Technically, we already have a checking account with Bank B but we only use the debit card attached to the account. I treat it like a credit card with a $2,000 credit limit. Whenever anyone uses their debit card, I reimburse the account as if paying an expense from Bank A. The account was never set up in PowerChurch as a checking account and has never been reconciled. So I do not feel I can use a "transfer" entry.

I also tried doing a journal entry to credit Bank A (01 Fund) checking account and debit Bank B (04 Fund) but the system did not consider the transaction in balance because I did not have a debit and credit for EACH fund.

I feel like I need to start from scratch. So, what do I debit and credit to create these new accounts in PowerChurch?

[NeilZ]

I am new to this forum; our church uses PowerChurch10 and I have been treasurer for 2 years but we don't use the program to its full capability; financially, church business is getting a little more complicated and I wanted to try and keep up with everything, properly, on the program.

Our church wants to close our current checking account at Bank A and open new accounts with that money at Bank B (checking/savings/building fund). What do you debit and credit for the new accounts?

Technically, we already have a checking account with Bank B but we only use the debit card attached to the account. I treat it like a credit card with a $2,000 credit limit. Whenever anyone uses their debit card, I reimburse the account as if paying an expense from Bank A. The account was never set up in PowerChurch as a checking account and has never been reconciled. So I do not feel I can use a "transfer" entry.

I also tried doing a journal entry to credit Bank A (01 Fund) checking account and debit Bank B (04 Fund) but the system did not consider the transaction in balance because I did not have a debit and credit for EACH fund.

I feel like I need to start from scratch. So, what do I debit and credit to create these new accounts in PowerChurch?

FWIW ... v10.4 is no longer getting updates, you may want to think about upgrading in the next few months as there are more capabilities in v11.55.

That said. How are you currently using Powerchurch? What is setup as far as expenses and income accounts, do you reconcile from within the program, pay bills, track membership & contributions?

Really need more information before any advice can be given.

Finally, just a bit of advice I can give. It is NEVER a good idea to use a debit account as a charge card. Especially if that debit card is attached to your checking account. There are no real checks and balances, and there are too many stories of 'trusted' people who would never embezzle funds, succumbing to the temptation of using the card for personal use.

Its much better to setup a credit card with the bank, with subordinate cards so you know who is doing the purchasing, with all the charges aggregating to the main account, which is the one that the statement is created against.

[treasurerawc]

we are in the process of getting rid of debit cards and replacing w/credit cards.

We have in income account for the checking account & contribution and expense accounts. We do not use accounts payable to track/pay bills - just write checks through "maintain open invoices" or "manual checks". I reconcile w/in the program; we do not track membership or contributions.

[NeilZ]

we are in the process of getting rid of debit cards and replacing w/credit cards.

We have in income account for the checking account & contribution and expense accounts. We do not use accounts payable to track/pay bills - just write checks through "maintain open invoices" or "manual checks". I reconcile w/in the program; we do not track membership or contributions.

You're not using some of the most powerful parts of the program.

In any case, what you need to do to setup the new checking account is this.

1. Create an new asset account. If the current checking account is 1110-000 (its the default), create a new one, say 1120-000, and assign it to Fund Account 01.
2. Move the bulk of your money to the new checking account. This should be a simple transaction where you CREDIT the existing account, and DEBIT the new account. Since you're not moving money out of the 01 Fund, there shouldn't be a need to mess with the standard 01-3110-000 Equity/Net Assets account. How you do this move is up to you, but you could probably do it using a manual check entry by writing out a check on the old account, and depositing it in the new one.

Do not write any checks on the old account, only the new one. You'll definitely need to create a different check number start for the new account. Once you're sure all the outstanding checks on the old account have cleared, and you've reconciled it for the last time. Move the rest of the funds to the new account.

Again, before you do anything suggested here, do a complete backup of the files so you can back out of any changes if the results are not what is expected.

[treasurerawc]

What do you mean by "since you're not moving money out of the 01 Fund"? The new accounts I created begin with 04 because the new account is totally separate from the old account and I wanted to start fresh.

[NeilZ]

What do you mean by "since you're not moving money out of the 01 Fund"? The new accounts I created begin with 04 because the new account is totally separate from the old account and I wanted to start fresh.

There is no need to do that. This is still an operations checking account, you're closing the old account, right? So are you going to be creating new expense accounts under the 04 Accounting Fund? Creating a new asset account in 01 does mean its a whole new account.

Why reinvent the wheel.

If you're thinking that you could pay expenses you debit under an 01 expense account (IE: 01-5500-000 Electric Utility) with an 04-1120-000 checking account, that won't happen, as the system will flag it as going across funds.

[NeilZ]

That said ... if you're going to create a new Accounting Fund because you have a new checking account, you need to basically do this to move from the 01 checking to the 04 checking:


Under Manual Checks CREDIT the existing 01-1110-000 account, and DEBIT the 01-3110-000 net assets (or whatever unrestricted net asset account you have setup under the 01 fund). Enter a check number in the series you use for the old account. Enter an amount that will leave enough funds to cover any uncleared checks and/or fees.

Then take the check to the new bank and deposit.

Then create a transaction under FUND ACCOUNTING -> Enter Transactions

You're going to DEBIT the 04-1120-000, new checking account (DO NOT use the same series number as the original checking account), and CREDIT the 04-3110-000 Unrestricted Net Assets account.

That will complete the initial transfer. Once you're sure all existing checks have cleared the old account, move the rest of the funds in the same manner.

[treasurerawc]

I already found out you cant go across accounts on one of my attempts to create this entry. And yes, I was going to set up new expense accounts - I just copied the accounts we currently use and left out the old accounts we don't use any more to create my new chart of accounts.

That being said I think I understand what you are saying - in both replies but why cant I use the same series number as the original checking account?

[NeilZ]

I already found out you cant go across accounts on one of my attempts to create this entry. And yes, I was going to set up new expense accounts - I just copied the accounts we currently use and left out the old accounts we don't use any more to create my new chart of accounts.

That being said I think I understand what you are saying - in both replies but why cant I use the same series number as the original checking account?

Because using the same number (IE: 1110-000) to the program means that you're sharing ONE checking account across Accounting Funds.

Example:

We have three separate Accounting Funds: 01- Operating, BD-Building, MS-Missions. We only have one checking account.
The system maintains the proper balance in each Accounting Fund when you write checks in each fund. When the banking statement comes in, all the checks, deposits, etc will appear when reconciling. So you just have to reconcile one account.

However, in your case you're starting a new account at a new bank, so you need to let the system know that by using a different account number, IE: 04-1120-000.

[treasurerawc]

So just putting "04" in front will not allow the system to separate the entries between two funds? (for example 04-1110 and 01-1110 for the checking account)

[NeilZ]

So just putting "04" in front will not allow the system to separate the entries between two funds? (for example 04-1110 and 01-1110 for the checking account)

That's what I said. The main 4 digit account number links the two asset accounts.

[treasurerawc]

OK. Thanks for your help.