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Can someone help me understand how best to handle the following situation? I am not an accounting person so I usually overthink things and make them much, much harder than they have to be! We are on PC+ 11.55 on Windows 10.

We often purchase study books, or t-shirts for members, etc., etc. We buy them using a church credit card and charge them to the expense account for that item, such as "christian ed" or "promotional items" and then most members reimburse us for the cost, after the bill has already paid.

I am handling these the same way my predecessors did: they brought those reimbursements in as contributions, into an income fund as follows:
117 Christian Education contribution fund which make the following entries:
DB 01-1055-000 bank account
CR 01-4076-000 Christian Education income account

In the above scenario, on our income/expense reports, the expenses for Christian Ed sometimes go over budget, but the reimbursements, which show in the income section above actually reduce the expenses.

Our treasurer would prefer to see the expense accounts show a more accurate picture, for the reimbursements to reduce the expenses when the reports are printed, and not to show them as being over budget. She would like us to bring these items in as follows instead:
117 Christian Education contribution fund
DB 01-1055-000 Bank account
CR 01-5715-000 Christian Education Expense Account

Is that acceptable accounting practice to handle them this way? If not, what would you do?

Thank you!!
Denise Carr
Community Presbyterian Church
Forsyth, MO

compresby486 wrote:Can someone help me understand how best to handle the following situation? I am not an accounting person so I usually overthink things and make them much, much harder than they have to be! We are on PC+ 11.55 on Windows 10.

We often purchase study books, or t-shirts for members, etc., etc. We buy them using a church credit card and charge them to the expense account for that item, such as "christian ed" or "promotional items" and then most members reimburse us for the cost, after the bill has already paid.

I am handling these the same way my predecessors did: they brought those reimbursements in as contributions, into an income fund as follows:
117 Christian Education contribution fund which make the following entries:
DB 01-1055-000 bank account
CR 01-4076-000 Christian Education income account

In the above scenario, on our income/expense reports, the expenses for Christian Ed sometimes go over budget, but the reimbursements, which show in the income section above actually reduce the expenses.

Our treasurer would prefer to see the expense accounts show a more accurate picture, for the reimbursements to reduce the expenses when the reports are printed, and not to show them as being over budget. She would like us to bring these items in as follows instead:
117 Christian Education contribution fund
DB 01-1055-000 Bank account
CR 01-5715-000 Christian Education Expense Account

Is that acceptable accounting practice to handle them this way? If not, what would you do?

Thank you!!
Denise Carr
Community Presbyterian Church
Forsyth, MO

It is not good accounting procedure to take reimbursements and credit the expense account.

What I would do is this: in your next fiscal year do the following:

1. Create an income account for CE reimbursements, with a subaccount. For example: 01-4410-200 (I'd place this under any miscellaneous income header).
2. Create an Expense account for CE reimbursable purchases, with a subaccount. For example 01-5720-200

The subaccount will tie the income and the expense together.

Then you can run the standard Fund Accounting Subaccount Report. It will then show how much was spent, and how much was received as reimbursement, this will then show what the actual cost is to the church. You will still see an expense to the church, but you'll also see the income that offsets it.

Again, I always suggest that you get the advice of an accountant familiar with fund accounting.

Thanks for the suggestions. I will take this info to the treasurer and see what she thinks.
This sounds like it would be way easier too!

Thanks again!
Denise Carr
Community Presbyterian Church
Forsyth, MO