Accounting Question

[northside]

I am trying to set up our Cooperative Program giving. Each month we send a percentage of our tithes and offerings. If I set it up in contributions as a percentage and put in temporarily restricted funds....how do I get it out of there to write a check so it comes out of the bank and into an expense account?

Thanks!

[NeilZ]

I am trying to set up our Cooperative Program giving. Each month we send a percentage of our tithes and offerings. If I set it up in contributions as a percentage and put in temporarily restricted funds....how do I get it out of there to write a check so it comes out of the bank and into an expense account?

Thanks!

There are two things you need to do (you may have done this, but I'm going to walk through it to be sure):

1. You should have created a new Contributions Fund that is setup to point to a temp restricted income account in Fund Accounting.
2. On your normal tithes and offerings Contribution Fund, you setup a percentage (say 10%) of those contributions to be listed under the new Contributions Fund.
3. When you post Contributions, the system should create a transaction that shows 90% of contributions going to the standard offerings income account, and 10% going to the temp restricted income

That's how you get the money into that restricted account, to get it out:

1. You have an expense account setup to cover the sending of funds to the cooperative program. I'm assuming its an expense that falls under missions or something like that, and NOT a liability that must be paid, or a pass through. If it IS such a liability, then that is something completely different, and must be setup differently.

2. You enter an Invoice each month to write a check, or enter a manual check to send an EFT transfer. On this check you enter the usual credit to the checking account, and debit to an expense account, you will then click on the Release Restricted Funds button at the bottom of the Invoice or Manual Check window; select the restriction you're releasing funds from; click on NEXT then enter the amount being released (usually the amount entered on the original invoice/manual check) along with any notes; then click FINISH.

The system will then create two additional entries on the invoice/manual check showing the release of the funds.

Does this help?

[northside]

Your instructions are great, but I have apparently done something wrong.

When I check the release restricted funds on the manual invoice, the account I set up doesn't show up.
I set the account up as an income account under the grouping "Temporary restricted funds".
I checked the box "this is a release account" .

Can you think of something I might have done wrong?

[NeilZ]

Your instructions are great, but I have apparently done something wrong.

When I check the release restricted funds on the manual invoice, the account I set up doesn't show up.
I set the account up as an income account under the grouping "Temporary restricted funds".
I checked the box "this is a release account" .

Can you think of something I might have done wrong?

Yep .. you should have gone and setup the restricted account using the Maintain list of Donor Restrictions function under Accounting -> Funds Accounting -> Setup.

The good news is you can still add that Restriction. Before you start do 2 things: 1) A Powerchurch backup so you can restore back to the start if it doesn't appear correct, 2) See the note at the bottom.

===================================

Open up Maintain List of Donor Restrictions from the menu. The next steps are all listed on the windows that appear.

In Step 1, enter the name of the restriction, the type of restriction (temporary is set as default so let that alone), the accounting fund where these accounts are located, and any notes on this restriction.

Step 2: is where you specify the fund balance account. Since this is a restricted fund, you need to show the fund balance so it shows up on reports as being different from normal income. If you did NOT create a fund balance account previously, create one now under the Temporarily Restricted header. You'll have to create a transaction to move funds from unrestricted net assets to this new fund balance account. I'll have the transaction below. If you DID create a separate fund balance for this, CHECK the checkbox next to Use Existing Account and select it from the list.

Step 3: specify the INCOME account. Since you did create this, select the checkbox and find the account in the list.

Step 4: specify the RELEASE account. Again, since you created this, select the checkbox and find the account in the list. Usually this account is setup in the 4800 number series, if you did not create it there, you can change the number later in the Maintain Chart of Accounts function.

Step 5: specify the EXPENSE account. This is optional, you don't have to do this, but if you use the SAME expense account every time, you can select it from the list as you've done above.

Step 6: specify the Contribution Fund. This is also optional. Again, you've already done that, so do as above, just make sure you select the 'special' fund you created to receive the automatic tithe.

Now you're done.

However, if you did not create a temporarily restricted FUND BALANCE account prior to creating the restriction above, you're going to have to create a transaction in Funds Accounting to move funds. You're going to have to know how much you CURRENTLY have set aside for this purpose, then create the following transaction (assuming 1000.00 is the amount)

01-3110-000 Unrestricted Net Assets DB 1000.00 * see note below
01-3210-000 Temp Restricted Fnd Bal CR 1000.00

You normally do not need to touch these accounts as the system maintains the balances there.

* NOTE:

You may not have created the separate fund balance account when you created that income account outside of the Maintain List of Donor Restrictions function. I suspect the unrestricted net assets account is being updated as its the default. You can check this before doing all the steps above by going to the Maintain Chart of Accounts, finding the income account you created from the list and double clicking on it. On the next window, select the DETAILS button, and check the ACCOUNT tab for the 'close to' account that is listed. As I said previously, I suspect it will be the default 01-3110-000 NET ASSETS Fund Balance account (the 3110 is the Powerchurch default, you may have a different number). If not, the one listed should be one you created especially for this temp restricted income, and you should select it in Step 2 above.

I hope this helps.