Question Re: Paying Bills

[flgirl]

So, I just inherited our church finances with a few meeting times with the previous financial secretaries, who are no longer available for questions. I have very strong computer and analytical skills but limited basic accounting knowledge. So, please forgive me if I use bad terminology. I just wanted to run this by you guys to make sure I'm not missing anything or misunderstanding processes.

We have a General Fund (01) checking account and a Missions checking account (30). I receive an invoice, AMEX for example, enter the bill under Maintain Open Invoices, paying close attention to entering the appropriate expense accounts, assets, etc., and I physically pay the bill through the main (General Fund 01) account. Print, post to fund accounting, post transactions. The end. This is how I was trained.

Should I be splitting the invoice and pay general through the general account and missions through the missions account? I feel like the missions account is not actually paying the bill. There has not been a missions to general transfer in many months. Am I misunderstanding something? What does your church do in these cases?

I'm afraid I have much cleaning of the system to do, but I'm actually pretty excited about this opportunity and I feel like I can do this. Thanks for your help!!

[NeilZ]

So, I just inherited our church finances with a few meeting times with the previous financial secretaries, who are no longer available for questions. I have very strong computer and analytical skills but limited basic accounting knowledge. So, please forgive me if I use bad terminology. I just wanted to run this by you guys to make sure I'm not missing anything or misunderstanding processes.

We have a General Fund (01) checking account and a Missions checking account (30). I receive an invoice, AMEX for example, enter the bill under Maintain Open Invoices, paying close attention to entering the appropriate expense accounts, assets, etc., and I physically pay the bill through the main (General Fund 01) account. Print, post to fund accounting, post transactions. The end. This is how I was trained.

Should I be splitting the invoice and pay general through the general account and missions through the missions account? I feel like the missions account is not actually paying the bill. There has not been a missions to general transfer in many months. Am I misunderstanding something? What does your church do in these cases?

I'm afraid I have much cleaning of the system to do, but I'm actually pretty excited about this opportunity and I feel like I can do this. Thanks for your help!!

If you are paying a bill for Mission committee operating costs, then that should come out of your operating or general fund. This is something that should be budgeted and accounted for.

As far as other things such as sending money to a mission, helping to pay for groceries or food bank donation, etc, that should come out of the Mission fund and its checking account.

This is the way its handled at one church I assist at.

That said, I would definitely get with the head of staff/committee heads/finance committee to verify how these bills should be accounted for.

[Matt]

You can split a bill between the general fund and the missions fund, but only use one checking account.

Let's say you have a $100.00 bill and $70.00 of it needs to be paid from the General fund and $30.00 needs to be paid from the Missions fund. Let's also assume you cut the check from the General Fund checking account. You would input the entry as follows:

Debit 01-5xxx-000 Expense $70.00
Credit 01-1110-000 General Fund checking $70.00

Debit 03-5xxx-000 Expense $30.00
Credit 03-1110-000 General Fund checking $30.00

[NeilZ]

Matt ...

here's the question .. are you assuming that the mission fund uses the same checking account in that example ??

I didn't take that away in the initial explanation, unless I missed something.

[Zaina]

What I took from the original post was that fund 01 is the general but fund 30 is the Missions. In this case, if the expenditure is for the Missions, it should be a credit to the 30-bank and a 30-expense. It shouldn't cross funds like 01-bank and 30-expense. Excuse me if I misread. It can be the same physical bank account but the balance for that bank account showing in fund 30 should be the portion that belongs to the Missions.