re-dating a transaction

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sojorner
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Joined: Wed May 03, 2017 2:01 pm

re-dating a transaction

Post by sojorner »

I have an issue where I need to back date a transaction. ISSUE: We've set up the use of credit cards for our professional staff, primarily to allow them to procure professional expense items using the card rather than having them use their own cash/card and then reimburse them. This works well for most of the year. the problem is that when there are purchases at the end of a fiscal year, but we do not see the statement and hence pay the bill until the following fiscal year. We just became aware of this issue in that one professional identified a number of transactions reported in the current fiscal year actually occurred in the previous fiscal year. What this does is reduce their available professional expenses for the current year!! Since the transactions have already been posted in this fiscal year, how do I reverse just those on the credit card payment and post them in last year's professional expense account? The cash credit card payment occurred this fiscal year. I'll have the same problem at the end of this fiscal year. So I also need to figure out how to do this going forward. Thanks

Jeff
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Re: re-dating a transaction

Post by Jeff »

For the entry that was recorded this fiscal year that should have been last year. I am assuming the transaction was posted in January 2018 and should have been December 2017

January 2018
Credit Expense Account (decrease expense in 2018 )
Debit a Credit Card Liability Account (decrease the payable in 2018)

December 2017
Debit Expense Account (increase shows an expense in 2017)
Credit Credit Card Liability Account (increase shows as a payable in 2017)

NeilZ
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Re: re-dating a transaction

Post by NeilZ »

As far as keeping it from happening again, it will be a training issue.

I'm assuming that you using a Credit Card Liability account, as does Jeff in his example above.

You need to make sure that the persons using the credit card give whomever enters the credit card transactions any receipts; whether in-person store receipts or online purchases, when they are initiated and paid for by the card.

So, if there are purchases on December 30 2018, those receipts should be to the entry person the next business day, with the Powerchurch entry dated as of Dec 30th.

This will debit the expense account for 2018 and will not show expenses in January.

FWIW .. they can give the entry persons those receipts the beginning of January, and as long as the transaction is entered with the date in December, and posted to December, the 2018 budget will be used.
Neil Zampella

Using PC+ since 1999.

sojorner
Posts: 21
Joined: Wed May 03, 2017 2:01 pm

Re: re-dating a transaction

Post by sojorner »

Thank you for the responses. some follow-up questions / comments.
1) is the Credit Card liability account an actual liability account? My question then is that, if I debit a liability in 2018 doesn't that carry on for the year and affect the usual(payroll deductions etc.) liabilities total? or do liabilities carry year over year and continually balance out.
2) The way it currently works is that they make their purchases with the credit card.
We get a statement the following month.
We then provide them the statement for their expenditures and request that they attach the receipts along with the purpose for each expense so we know which expense account to debit - Not all are for professional expenses. Once we get that, we then enter the expenses for each account and pay the credit card bill.
Getting the receipts the day of or the next day or even in the same month would be logistically impossible for many of the expenditures.
Since this was a new activity last fiscal year, we hadn't thought about the timing on posting the credit card expenditures, and got a lot of flack this year when we put out statements on professional expense budgets.

NeilZ
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Re: re-dating a transaction

Post by NeilZ »

sojorner wrote:Thank you for the responses. some follow-up questions / comments.
1) is the Credit Card liability account an actual liability account? My question then is that, if I debit a liability in 2018 doesn't that carry on for the year and affect the usual(payroll deductions etc.) liabilities total? or do liabilities carry year over year and continually balance out.
Its a true liability account. The funds are moved and affect the I&E report the for the month and year the liability account was credited and the expense account debited. Much like payroll taxes in December, you really don't pay them until January, but they are shown against the previous year in December.
2) The way it currently works is that they make their purchases with the credit card.
We get a statement the following month.
We then provide them the statement for their expenditures and request that they attach the receipts along with the purpose for each expense so we know which expense account to debit - Not all are for professional expenses. Once we get that, we then enter the expenses for each account and pay the credit card bill.

Getting the receipts the day of or the next day or even in the same month would be logistically impossible for many of the expenditures.
Since this was a new activity last fiscal year, we hadn't thought about the timing on posting the credit card expenditures, and got a lot of flack this year when we put out statements on professional expense budgets.
There is no reason why they cannot get you receipts within a day or two of making the purchase. Online receipts can be emailed along with the reason for purchase (professional expenses, bible study booklets for Christian Ed), paper receipts can be scanned and emailed with the reason given in the email.

When you purchase with a credit card, you get a receipt of some type, so saying that you need to see it within a day or two is not unreasonable. I cannot understand how any credit card receipt would be logistically impossible to send or drop off in a day or two. I admit when I was traveling for a company and had a card, I had a week of receipts, but the expense report was filed the first business day after return. Having a church credit card is not a right, its a privilege; one that has a few requirements such as timely (within a few days) return of receipts.

This will also save time as the office has already processed the purchase into the system, and filed the receipt. All the office then does is reconcile the receipts against the statement using the standard Powerchurch 'Reconciliation' function. No having to go through the credit card statement and provide them a 'statement' then requesting receipts.

This also provides financial oversight, and eliminates the possibility of what caused you to ask the question in the first place.
Neil Zampella

Using PC+ since 1999.

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