We've been using PowerChurch Plus for many years and have never set up Donor Restrictions. I would like to start using it and integrate it into our existing chart of accounts. I would have to create the Release accounts and Restricted Equity accounts, but we already have Income accounts for each restricted area. As well I would need to create a Released from Restrictions account.
After backing up my data I have made an attempt to set this up and made a few entries to check my work. The first balance sheet I ran shows all monies ever posted to the income account (which has data that goes back for years) are now in the Restricted Equity account, which makes the number exceedingly high and not even close to accurate.
Question: Is there a way to do this using the existing Income accounts? Or do I need to now create a new Income account for each restriction (which I would prefer not to do)?
SingItMax wrote:We've been using PowerChurch Plus for many years and have never set up Donor Restrictions. I would like to start using it and integrate it into our existing chart of accounts. I would have to create the Release accounts and Restricted Equity accounts, but we already have Income accounts for each restricted area. As well I would need to create a Released from Restrictions account.
After backing up my data I have made an attempt to set this up and made a few entries to check my work. The first balance sheet I ran shows all monies ever posted to the income account (which has data that goes back for years) are now in the Restricted Equity account, which makes the number exceedingly high and not even close to accurate.
Question: Is there a way to do this using the existing Income accounts? Or do I need to now create a new Income account for each restriction (which I would prefer not to do)?
Help, thanks!
I hope you did a Powerchurch backup of the accounting database first, so you can back out of those changes.
Did you use the Maintain List of Donor Restrictions function? I'm also assuming that these are temp restricted accounts.
The Donor Restriction function allows you to select existing income and equity accounts to add to the restriction.
Unfortunately, not knowing exactly what you did I can't help you more than that.
Yes I did a backup of all data.
Yes I used the Maintain a List of Donor Restrictions function under Fund Accounting. Yes temp restricted.
As mentioned I used existing Income accounts, but had to set up new Release and Equity accounts as they didn't exist yet. I changed the income account closing to the new restricted equity account. I am following the manual and a document called "Accounting for Contributions".
SingItMax wrote:Yes I did a backup of all data.
Yes I used the Maintain a List of Donor Restrictions function under Fund Accounting. Yes temp restricted.
As mentioned I used existing Income accounts, but had to set up new Release and Equity accounts as they didn't exist yet. I changed the income account closing to the new restricted equity account. I am following the manual and a document called "Accounting for Contributions".
Now I'm confused, as in your original post you said:
Question: Is there a way to do this using the existing Income accounts? Or do I need to now create a new Income account for each restriction (which I would prefer not to do)?
I was assuming that you did not use the original income account when you first setup the restriction. That said, why did you change the income account's closing fund balance, the system should have done that automatically when you created the restriction.
In my original post I said: "I would have to create the Release accounts and Restricted Equity accounts, but we already have Income accounts for each restricted area." I do want to use existing accounts if possible.
When creating a donor restriction there is the option to use existing accounts so I chose that. To walk you through what I did after selecting Maintain List of Donor Restrictions:
Step 1. I created a new donor restriction, choosing temporarily restricted.
Step 2. I created a new fund balance account since we did not have one yet.
Step 3. Under specify income account there is the option to choose from the existing income accounts, so I chose the one we have already used for this restriction.
Step 4. I created a new release account for the restriction.
Step 5. Under expense account there an option to choose existing, and we already have an expense account for the restriction, so I chose that one.
Step 6. Under specify contribution fund, we also already had a contribution fund for the restriction, so I chose that one.
And then finish.
I am simply following the steps as designed in the program. Is this incorrect? If I can't use existing income accounts that already contain data, why is that an option? We only had one fund balance account before and the income and expense accounts closed to that one. When creating this new Donor Restriction, I assuming the system changed where the income account closed to. Yes?
I ran an account activity report for the income account in question. All funds ever posted to the income account are now sitting in the fund balance account, even though of course, they have been used in previous years, and at December 2018 year end, that account would have been at zero. Do I need to do a journal entry to close the account back to our year end numbers? Would that create more confusion?
Your help in clarifying the correct procedure is greatly appreciated.
Thank you.
In my original post I said: "I would have to create the Release accounts and Restricted Equity accounts, but we already have Income accounts for each restricted area." I do want to use existing accounts if possible.
When creating a donor restriction there is the option to use existing accounts so I chose that. To walk you through what I did after selecting Maintain List of Donor Restrictions:
Step 1. I created a new donor restriction, choosing temporarily restricted.
Step 2. I created a new fund balance account since we did not have one yet.
Step 3. Under specify income account there is the option to choose from the existing income accounts, so I chose the one we have already used for this restriction.
Step 4. I created a new release account for the restriction.
Step 5. Under expense account there an option to choose existing, and we already have an expense account for the restriction, so I chose that one.
Step 6. Under specify contribution fund, we also already had a contribution fund for the restriction, so I chose that one.
And then finish.
I am simply following the steps as designed in the program. Is this incorrect? If I can't use existing income accounts that already contain data, why is that an option? We only had one fund balance account before and the income and expense accounts closed to that one. When creating this new Donor Restriction, I assuming the system changed where the income account closed to. Yes?
OK .. as I said, I was confused about that original statement. Everything you did was correct.
I ran an account activity report for the income account in question. All funds ever posted to the income account are now sitting in the fund balance account, even though of course, they have been used in previous years, and at December 2018 year end, that account would have been at zero. Do I need to do a journal entry to close the account back to our year end numbers? Would that create more confusion?
Your help in clarifying the correct procedure is greatly appreciated.
Thank you.
Are you sure that these funds are sitting in the fund balance account? An account activity report shows anything that happened to that account. Did you run a Balance Sheet on the Accounting Fund (its the 01 account I'm assuming).
The balance sheet will show if there are any funds in that fund balance account.
Yes I ran a Balance Sheet on the Accounting Fund. (It's 02 in our books. Not sure why.)
Yes the funds that were in the Fund Balance are now in the Restricted Equity account. The amount in the new Restricted Equity (3812) matches the Account Activity report for the Income Account.
I ran a second Donor Restriction to check my steps and now all their equity from ages past has been moved to the new restricted equity account. All this moving of funds has left my Fund Balance in the negative.
I'm going to assume that because the income account is now connected to a new restricted equity account and has never been released properly, that a journal entry is required to release funds. But since all the income is for prior years, perhaps a better procedure would be to create a new income account.
I would also assume the expense account connected to these funds can be left as is since it closes to our general 3001 Fund Balance.
SingItMax wrote:Yes I ran a Balance Sheet on the Accounting Fund. (It's 02 in our books. Not sure why.)
Yes the funds that were in the Fund Balance are now in the Restricted Equity account. The amount in the new Restricted Equity (3812) matches the Account Activity report for the Income Account.
I ran a second Donor Restriction to check my steps and now all their equity from ages past has been moved to the new restricted equity account. All this moving of funds has left my Fund Balance in the negative.
I'm going to assume that because the income account is now connected to a new restricted equity account and has never been released properly, that a journal entry is required to release funds. But since all the income is for prior years, perhaps a better procedure would be to create a new income account.
I would also assume the expense account connected to these funds can be left as is since it closes to our general 3001 Fund Balance.
It does sound that way ... evidently the system expects that you would be creating the donor restriction in the same year you created the income account.
Your idea about creating the new income account is probably the way to go. I would create it under any 'Temporary Restricted Income' group account that may be on the system, I believe it defaults to 4201 with a description of TEMPORARILY RESTRICTED.
FWIW .. you really don't need to add an expense account unless the restriction is that funds can only be used for that specific expense.
Since you said you did a backup prior to doing any changes, I would definitely back out all the changes, and redo the restriction with the new income account.
You can then make the old income account inactive, and point the Contribution Fund to the new income account.
Thanks Neil. That is the direction I decided to go. Nice to have it confirmed.
It does make sense that all entries would now close to the new restricted account because there's no way to tell the system that it is in effect from a certain day.
I'm considering changing the existing account number to something that is out of our regular range and then create a new income account with the old number. This way others that refer to the COA can refer to the same number as it's always been. Would you advise against this? They would only be looking at current data that I provide in reports. And no one accesses PowerChurch's accounting and contributions, etc other than myself.
Thanks again for sorting through this with me. I really do appreciate your help.
SingItMax wrote:Thanks Neil. That is the direction I decided to go. Nice to have it confirmed.
It does make sense that all entries would now close to the new restricted account because there's no way to tell the system that it is in effect from a certain day.
I'm considering changing the existing account number to something that is out of our regular range and then create a new income account with the old number. This way others that refer to the COA can refer to the same number as it's always been. Would you advise against this? They would only be looking at current data that I provide in reports. And no one accesses PowerChurch's accounting and contributions, etc other than myself.
Thanks again for sorting through this with me. I really do appreciate your help.
I wouldn't use the same number. Using a new number under the Temp Restriction heading would inform everyone that these funds are being handled in a different manner, and are only used for a certain purpose. The account would be seen in a different spot on reports, and on the Balance Sheet thus emphasizing the restriction on the funds.
I have made an attempt to set this up and made a few entries to check my work. The first balance sheet I ran shows all monies ever posted to the income account (which has data that goes back for years) are now in the Restricted Equity account, which makes the number exceedingly high and not even close to accurate.