User Support Forum

Hi
We are wondering how to reflect December expenses that have not actually been paid in December. Can we record as an Accounts Payable or will that not post to Fund Accounting? We are looking to move to accrual accounting going forward.
Thank you

fpchurch wrote:Hi
We are wondering how to reflect December expenses that have not actually been paid in December. Can we record as an Accounts Payable or will that not post to Fund Accounting? We are looking to move to accrual accounting going forward.
Thank you

Um ... how does a church do accrual accounting ???

A church, by its nature, lives on Contributions of one sort or another, there is nothing to account for until its in the plate. Thus most (if not all) churches are cash basis accounting.

Powerchurch was setup as cash basis, there really isn't a way to do accrual accounting in Powerchurch.

As such, expenses are posted when they are paid, not when they were charged.

If December has not been closed, expenses can be recorded (Dr. expense account), (Cr. Accounts Payable). In January, when payment is made, (Dr. Accounts Payable), (Cr. checking account). Likewise, revenue can be recorded (Dr. Accounts Receivable), (Cr. income account). In January, when payment is received, (Dr. Checking Account), (Cr. accounts receivable). Rather than straight cash accounting, this may be necessary to reflect a more accurate actual/budget picture.

talewinesr wrote:If December has not been closed, expenses can be recorded (Dr. expense account), (Cr. Accounts Payable). In January, when payment is made, (Dr. Accounts Payable), (Cr. checking account). Likewise, revenue can be recorded (Dr. Accounts Receivable), (Cr. income account). In January, when payment is received, (Dr. Checking Account), (Cr. accounts receivable). Rather than straight cash accounting, this may be necessary to reflect a more accurate actual/budget picture.

FWIW .. there really isn't a separate 'Accounts Payable' or 'Accounts Receivable' account in Powerchurch. You have income Contributions and Expenses. Accounts Receivable is a separate module that is used for things like a book store, etc. Contributions are strictly income, not a receivable.

The Accounts Payable module will credit the checking account, and debit the expense account. When posted to funds accounting, this updates the system.

Contributions are treated as deposits: The checking account is debited, and the income account (Tithes & offerings, Deacons account, whatever) is credited to reflect the income.

So, can you explain in terms of how Powerchurch expects transactions to be created what you posted in your reply ??