MOnies received for next FY

[sojorner]

In the current Fiscal year, we run an annual pledge drive for the Next Fiscal year. My question:
How to account for that during the current year (we are on a cash basis), and then how do I show that money as available in next year's budget report. If I use a temporarily restricted donor fund and then release the monies next year, it doesn't show anywhere except in the income / expense statement (and Balance sheet when released) where it balances itself out - releases (debited)/ released from restriction (credited) on the income side, giving a net zero on the income side. Then if I use those monies that as part of the general operating budget expenses, my deficit will be higher than actual.
On a cash basis, you can't use a liability account making it deferred income and then moving to an income the next year (which is how it seemed to have been in the past in QuickBooks - I don't think that is truly a correct method either).

Thus if I would have the following:
Budgeted Monies available for the year:
Pre-paid pledges (rec'd last FY): $1000
Pledges rec'd during current FY: $5000
TOTAL useable monies for this FY: $6000

Expenses: $6100
------------
Excess (Deficit): ($100)


If I have to receive the 'pre-paid' pledges in last fiscal year, and can't show them in the year intended for as income, then the budget report shows:
Pledges rec'd during current Fiscal yr: $5000

Expenses: $6100
------------
Excess (deficit): ($1100)

How to set this up so that the first Budget report is what shows and not the second one???

[NeilZ]

In the current Fiscal year, we run an annual pledge drive for the Next Fiscal year. My question:
How to account for that during the current year (we are on a cash basis), and then how do I show that money as available in next year's budget, income /expense report. If I use a temporarily restricted donor fund and then release the monies next year, it doesn't show anywhere except in the income / expense statement where it balances itself out - releases (debited)/ released from restriction (credited) on the income side, giving a net zero on the income side. Then if I expend that as part of the general operating budget expenses, my deficit will be higher than actual.
On a cash basis, you can't use a liability account making it deferred income and then moving to an income the next year (which is how it seemed to have been in the past in QuickBooks).

Thus if I would have the following:
Monies available for the year:
Pre-paid pledges (rec'd last FY): $1000
Pledges rec'd during current FY: $5000
TOTAL useable monies for this FY: $6000

Expenses: $6100
------------
Excess (Deficit): ($100)


If I have to receive the 'pre-paid' pledges in last fiscal year, and can't show them in the year intended for, then I have
Pledges rec'd during current Fiscal yr: $5000

Expenses: $6100
------------
Excess (deficit): ($1100)

How to set this up so that the first Income/expense report is what shows and not the second one???

On a cash basis, which most churches are, income shown as received in the current year. You can't do much about that. What you can do is put the funds into a separate fund account (Fund code: NF)(you can use the same checking account), then at the beginning of the year, transfer the funds using TRANSFER accounts from the new fund's checking account (NF-1110-000) to the operating fund checking (01-1110-000). The transfer account will show up on the Income & Expense report. It won't show up as normal income for the year, but it will show up just before the final "Excess Income/Expense" line on the report.

The funds will also show as a transfer on the Accounting Fund Balances report.

The transfer accounts (9000 series) must be in both funds. This example is adapted directly from the online help:

NF-1110-000 Checking Account CR 750.00
NF-9020-000 Transfer to Funds DB 750.00
01-1110-000 Checking Account DB 750.00
01-9510-000 Transfer from Funds CR 750.00

The problem is that you will need to segregate those funds coming in for next year's pledges. That means you have to do this when you process contributions, which also means whoever does contributions data entry has to know where the funds are supposed to go.

That is more of a problem then figuring how to show the funds in next year's I&E reports.

[sojorner]

Neil,
Thank you for the reply. That is how I originally saw it, but was hoping for something more elegant, but could not see any other way to do it. For the contribution part of it, we set up a contribution fund for Next FY Pledges as received. These are currently going into a restricted fund as a 'holding fund' if you will. As I've become more familiar with this program, i see that was not the best way to record that income.
So my next question to you is:
I currently have these in a 'restricted fund'. I know how to create the other Fund (xx) that you are referring to. Can I move that money to the other fund without using the transfer accounts? Can I simply do the checking account Credit(Fund 01)/Debit(fund 02), Debit (fund01 equity)/Credit (fund02 equity). Would I also need to deal with the income accounts also?
Thanks

[NeilZ]

Neil,
Thank you for the reply. That is how I originally saw it, but was hoping for something more elegant, but could not see any other way to do it. For the contribution part of it, we set up a contribution fund for Next FY Pledges as received. These are currently going into a restricted fund as a 'holding fund' if you will. As I've become more familiar with this program, i see that was not the best way to record that income.
So my next question to you is:
I currently have these in a 'restricted fund'. I know how to create the other Fund (xx) that you are referring to. Can I move that money to the other fund without using the transfer accounts? Can I simply do the checking account Credit(Fund 01)/Debit(fund 02), Debit (fund01 equity)/Credit (fund02 equity). Would I also need to deal with the income accounts also?
Thanks

I'm assuming that there's only one checking account. What I would do is this:

1. Do a backup of the accounting files so you can back out if this doesn't turn out as expected.
2. Create the new accounting fund, include the checking account (NF-1110-000 that will use same bank account as the 01 fund), a tithes & offerings income account, net equity, as well as the transfer accounts.

This next part just moves funds, it does not do anything else:

3 Release the all the funds in the operating fund (01) restricted account using a Fund Accounting transaction. Click on the Release restricted funds button and enter the reason you're doing the release, then finish that process. Enter additional info if you want in the transaction notes, then save and then post that transaction. This moves the funds from the restricted net assets account (usually in the 3200- series) to the unrestricted net assets, usually the 3100-000 account in the operating fund.
4. Then just move the funds using a simple transaction, this won't show up on the I&E report.

01-1110-000 CR 1000.00
NF-1110-000 DB 1000.00

If you want to show the funds being moved to the 'hold' account, then I would using a transfer fund.

As far as income that's a different story. What I would do is use the transfer accounts, and leave the income accounts alone. Trying to show the income being moved can create issues on the balance sheet and so on. Using the transfer accounts you reflect on the I&E report that the funds were moved, and will show up on the 'bottom' line of over/under income to expense.

That transfer transaction can be used to show the amount received for next year being moved over, thus you may have to manually create a report or narrative, but you don't have to worry about being out of balance on the overall balance sheet.

All contributions going forward would be reflected in the new fund, and an I&E report on that fund will reflect all the income received in the bottom line as it does show the transferred amount.

Does this help?

[sojorner]

Neil,
Thanks again. pretty much sums it up on best way to move things around.
Thanks.
Doug