Adding Additional Checking account

[mikenerney]

We have been using PC+ for 6 years. For confidentiality reasons, our benevolence fund has been in the form of a handwritten checkbook at a different bank from our operating account. I am working to put the benevolence checking account "on the books" so that the balance will appear on our balance sheet. To preserve confidentiality, I will use a dummy vendor and record all of the handwritten checking account transactions as manual checks in PC+. How do I add a new checking account along with any outstanding checks from that account so they can appear on the check reconciliation screen when it's time to reconcile? Do I have to write them as manuals and add the amounts back to my opening checking acct balance via a journal entry? Just wondering if it's possible to do the normal "setup" for a new checking account like when we first installed PC+ .

[NeilZ]

We have been using PC+ for 6 years. For confidentiality reasons, our benevolence fund has been in the form of a handwritten checkbook at a different bank from our operating account. I am working to put the benevolence checking account "on the books" so that the balance will appear on our balance sheet. To preserve confidentiality, I will use a dummy vendor and record all of the handwritten checking account transactions as manual checks in PC+. How do I add a new checking account along with any outstanding checks from that account so they can appear on the check reconciliation screen when it's time to reconcile? Do I have to write them as manuals and add the amounts back to my opening checking acct balance via a journal entry? Just wondering if it's possible to do the normal "setup" for a new checking account like when we first installed PC+ .

My advice is this:

If you can, hold off writing checks on that account until you can get it reconciled using the existing checkbook, this way you have a starting balance that is clean. However, if you still have outstanding checks on that account after the reconciliation, then add them in after you add the account.

You can't use the Accounting Setup to add a new checking account. This is going to be a manual process, the manual pages I'm going to refer you to are from the PDF copy of the manual located in the PCPLUS115 directory. (I'm assuming you're on v11.55, and that you're going to be putting this all under the exising operations fund. If not let me know).

1. Add the new checking account as an ASSET account using the steps starting on page 213 of the manual.
2. You will probably need to have an INCOME account for this so create the income account if you don't already have one set aside for benevolences.
3. You will probably also need a Fund Balance (or equity) account, if you don't already have one setup. Since I suspect that you're going to be using an expense account under operations, I'd just use the existing 01-3110-000 which is the usual default.
4. To create the starting balance for the new checking account enter this, using 1112-000 as the new checking account, and $100 as the amount:

DB 01-1112-000 $100
CR 01-3110-000 $100

That's it. You should be able to run a Cash Management Report and Balance Sheet and see the additional assets.

5. Remember we talked about the outstanding checks after the last reconciliation? Right, now is the time to create the manual checks, in the AP module, using the date and check numbers issued. Next reconciliation will be done from within Powerchurch, and all the date should be there.

Does this help ??

[mikenerney]

Thanks for your help. We are not currently using income/expense accounts for designated funds. I am simply debiting the designated funds directly and crediting cash for each expense. The only item I'd like for you to confirm is the possibility that all checks have not cleared when I set up the new checking account. In that case, my plan was as follows:
Set up the beginning balance to be the checking account statement balance plus the total amount of all outstanding checks by debiting checking and crediting designated fund account.
Key each outstanding check as a manual check by debiting the designated fund and crediting the checking account.

I assume this will then put the outstanding checks on the list to be reconciled when the next statement comes in.
Please confirm my thinking. Thanks!

[NeilZ]

Thanks for your help. We are not currently using income/expense accounts for designated funds. I am simply debiting the designated funds directly and crediting cash for each expense. The only item I'd like for you to confirm is the possibility that all checks have not cleared when I set up the new checking account. In that case, my plan was as follows:
Set up the beginning balance to be the checking account statement balance plus the total amount of all outstanding checks by debiting checking and crediting designated fund account.

Yes, this should be dated as of the last bank statement, not your check register balance. Any check not cleared, or one written after the date of the statement should be considered as outstanding. You should NOT add any total of outstanding checks, as the bank statement shows the balance of that date.

Key each outstanding check as a manual check by debiting the designated fund and crediting the checking account.

Wait ... you do NOT debit a 'designated fund', you RELEASE funds from designated funds, after you debit an expense account. This will then properly show in the Income & Expense report as released funds.

I'm not sure what you're doing here. Please explain.

I assume this will then put the outstanding checks on the list to be reconciled when the next statement comes in.
Please confirm my thinking. Thanks!

Yes, if you enter the checks CR checking, and DB expense, they will show up in the reconciliation.

[mikenerney]

Neil -
I recognize that we have not been using the "Release from Restrictions" at all since our original setup for a couple of reasons. First, is that in my usage with a previous church, I found that the concept was too complex for volunteers to follow (especially with turnover in the payables area). My previous background is in the accounting field so it makes sense to me, but I don't see the need to use it for each check paid out of a designated fund. Second, when the congregation looks at a P&L, they are thinking of expenses supported by operating income, i.e. weekly undesignated giving. Rather than complicate this during our business meetings. I began booking one year-end entry to record total designated income released from restriction and total designated expenses. In addition, I book depreciation at year-end as well. This satisfied the outside audit we recently had done as it puts our books on a GAAP basis annually. It just keeps things cleaner and easier to understand for church members during the course of the year. Thoughts or concerns?
Given this explanation, does my previous plan to record the benevolence expenses make sense?

[NeilZ]

Neil -
I recognize that we have not been using the "Release from Restrictions" at all since our original setup for a couple of reasons. First, is that in my usage with a previous church, I found that the concept was too complex for volunteers to follow (especially with turnover in the payables area). My previous background is in the accounting field so it makes sense to me, but I don't see the need to use it for each check paid out of a designated fund. Second, when the congregation looks at a P&L, they are thinking of expenses supported by operating income, i.e. weekly undesignated giving. Rather than complicate this during our business meetings. I began booking one year-end entry to record total designated income released from restriction and total designated expenses. In addition, I book depreciation at year-end as well. This satisfied the outside audit we recently had done as it puts our books on a GAAP basis annually. It just keeps things cleaner and easier to understand for church members during the course of the year. Thoughts or concerns?
Given this explanation, does my previous plan to record the benevolence expenses make sense?

Unfortunately, its not often I see someone with some accounting background, so I err on the side of caution. Given all this, yes it does make sense, with the proviso that my suggestions in my previous post (minus the part about the restricted funds -heh) are understood.

And, as usual, I always advise to do a backup of the accounting files (or the entire database if you choose) prior to doing any changes in case what you change does not come out the way you expected.