I am the new bookkeeper for our church, and am attempting to get PC+ V9 up and running. I am looking at setting up the restricted contributions. The manual (pg 185-186) suggests "release" accounts using choir robes as an example. It seems to me that this just makes things overly complicated. If I am asked to cut a check for choir robes, the restriction HAS been met. I have no need to document it in the program. I also have no desire to list choir robes as an asset on the books since I would also have to start DEPRECIATING them!
Am I missing something here
Would it not accomplish my needs to just have income, expense, and balance accounts for the choir robes?
OR maybe even simpler, treat the donation as a liability.
Can someone shed some light on this subject for me?
People at my church do not have the time or desire for a complicated accounting system. The simpler I can keep things the better the chances that it will be used and understood.
Using restricted contributions seems to be confusing but actually is simple to set up and use. It basically allows you to track the money that is received for a specific purpose and be able to show that money was spent only for that purpose. The release accounts that the program automatically sets up do not have to show up on reports, they are used to track the income/expenses for whatever you are tracking. The money you collected will show up as a restricted donation. When you spend the money it will show up as an regular expense in whatever account you are using.
Using an example from our church. We have donations every year that are restricted to be used for Youth Program as example. I have this set up as a donor restricted and I accumulate all the money that we receive in this way. As I pay expenses for Youth Program they are posted as expenses and funds are released from restricted account to pay. Any time I can print out a balance sheet report and it will show me how much money remains for the youth program that has not already been spent, it's listed as a "Restricted Fund Balance" . It carries over from year to year and gives me a good way to insure that the money is only spent on youth programs.
This works well for this because we get this type of donor restricted income each year. You can also use it for short term projects, as example Choir Robes. In this case you would get, over some short period of time, donations restricted to be used for Choir Robes. At some point you would purchase the robes and hopefully use all the money you collected. By recording it as a donor restricted, you can always see what has been collected for this project and how much remains if any.
There was a very good discussion or this topic in the Tales from Tech section back last year. Look these up on website and see if that helps you understand the accounting.
