transfer to savings for a release acct

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Sandy
Posts: 49
Joined: Sat Jan 01, 2011 9:44 pm

transfer to savings for a release acct

Post by Sandy »

We have an account set up to save funds for major asset restoration. That fund receives a certain amount from our tithes and offerings. It is a restricted account and I transfer the funds to savings at the end of each month. It is set up in the contributions module. The problem I am having is that all funds in the savings account are supposed to be designated to this account. This includes interest which I have just posted to savings without showing that it should go to this account, Also we transferred money from our general account to savings for asset restoration. so while our savings shows the correct amount in that account, it doesn't show any the interest or transfer in the asset restoration account.

the account numbers used for this account are
Equity 01-3212-000
Income 01-4212-000
Release 01-4812-000

I am not sure how to reflect the correct amount in this acct.

Would I credit 01-3212-000 and debit 01-3110-000?
And should I do this with each interest payment?

Sorry for the long explanation I just want to do this correctly.
Thanks in advance.
Sandy
Sandy Daniel
Always learning and always grateful!

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: transfer to savings for a release acct

Post by NeilZ »

Sandy wrote:
Sat Jan 08, 2022 1:36 pm
We have an account set up to save funds for major asset restoration. That fund receives a certain amount from our tithes and offerings. It is a restricted account and I transfer the funds to savings at the end of each month. It is set up in the contributions module. The problem I am having is that all funds in the savings account are supposed to be designated to this account. This includes interest which I have just posted to savings without showing that it should go to this account, Also we transferred money from our general account to savings for asset restoration. so while our savings shows the correct amount in that account, it doesn't show any the interest or transfer in the asset restoration account.

the account numbers used for this account are
Equity 01-3212-000
Income 01-4212-000
Release 01-4812-000

I am not sure how to reflect the correct amount in this acct.

Would I credit 01-3212-000 and debit 01-3110-000?
And should I do this with each interest payment?

Sorry for the long explanation I just want to do this correctly.
Thanks in advance.
Sandy
The release account does not come into play until you actually pay out funds from the savings. Basically, you would create the same type of transaction (In Funds Accounting) as is created when you write a check and show money going out of checking. Debit savings (which shows an increase in balance), and credit checking. In addition, you should be showing any savings account interest as 'miscellaneous income', or 'interest income' if you have such an account. You need to account for that income in some way.

Hope this helps.
Neil Zampella

Using PC+ since 1999.

Sandy
Posts: 49
Joined: Sat Jan 01, 2011 9:44 pm

Re: transfer to savings for a release acct

Post by Sandy »

I understand the whole release process. the asset restoration fund is automatically restricted by the way it is funded in the contributions fund. It receives 1% of tithes and offerings. We transfer those funds monthly to our savings account. But we also transferred a large sum of money from our general fund to savings to be added to the asset restoration account but it is not reflected in the asset restoration acct. I feel like I should show an equity account transfer Basically from the unrestricted equity account which is 01-3110-000 to the restricted account which is 01-3212-000.

Our cash management report shows
Savings $44,321.47
Asset Restoration equity $19,166.68

I want our asset Restoration Equity to be equal to Savings. Is this possible?

Thanks
Sandy
Sandy Daniel
Always learning and always grateful!

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: transfer to savings for a release acct

Post by NeilZ »

Sandy wrote:
Sat Jan 08, 2022 9:29 pm
I understand the whole release process. the asset restoration fund is automatically restricted by the way it is funded in the contributions fund. It receives 1% of tithes and offerings. We transfer those funds monthly to our savings account. But we also transferred a large sum of money from our general fund to savings to be added to the asset restoration account but it is not reflected in the asset restoration acct. I feel like I should show an equity account transfer Basically from the unrestricted equity account which is 01-3110-000 to the restricted account which is 01-3212-000.

Our cash management report shows
Savings $44,321.47
Asset Restoration equity $19,166.68

I want our asset Restoration Equity to be equal to Savings. Is this possible?

Thanks
Sandy
The system will normally update the Funds Balance (equity) account when the checking or savings account is updated. The cash management report reflects TWO different Fund Balance account balances, if you're posting information from the 3000-series area of the report.

Based on that, they 'should not' be the same as one is reflecting the balance of a restricted account, and the other restricted funds That restricted fund balance should only show the amounts that come in from Contributions, and any you've moved to the restriction from general checking.

However, if you're showing the amount listed for savings from the ASSET Accounts area of the report (1000-series), that amount reflects the funds already existing in the account, as well as the funds in the restricted fund. Remember, when you release funds from a restricted account, you're moving funds from the restricted Fund Balance to the UNRESTRICTED Fund Balance from where it is then dispensed.

The restriction Fund Balance will always show the amounts that are restricted, and the unrestricted Fund Balance will only show funds that are not. The total of both should then equal the amount seen in the asset accounts balance.

I hope you can follow this as I'm doing this at 12:30 in the morning, and I'm hoping my logic is not as fuzzy as I feel right now.

If you moved funds from the general fund, to the savings account, but it is not showing as restricted then you need to do the following.

Do a DEBIT on the savings Fund Balance account, and a CREDIT on the restricted fund's Fund Balance account.

Here's an example using 01-3220-000 as the savings, and 01-3500-000 as the restricted account with funds being moved from general fund to the restricted account:

I would use two separate transactions to have a full audit trail of any funds being moved, and always do an accounting files backup using the Powerchurch backup utility:

1. Move 2500.00 from general checking to savings:

Code: Select all

01-1110-000    Checking   CREDIT      2500.00
01-1230-000    Savings     DEBIT        2500.00
You should see that the funds are now reflected in the Savings Fund Balance account as adjusted by the system (only happens after posting)

2. Now move the funds from unrestricted savings into restricted savings:

Code: Select all

01-3220-000   Savings Fund Balance     DEBIT    2500.00
01-3500-000   Restricted Fund Balance CREDIT  2500.00
This will then reflect the funds in the restricted account.
Neil Zampella

Using PC+ since 1999.

Sandy
Posts: 49
Joined: Sat Jan 01, 2011 9:44 pm

Re: transfer to savings for a release acct

Post by Sandy »

This makes sense to me but we don't have a separate equity account for savings The only unrestricted account we have is
01-3110-000. Can I use that account? Should I set up an equity account for savings? If so how do I do that?

Thanks,
Sandy
Sandy Daniel
Always learning and always grateful!

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: transfer to savings for a release acct

Post by NeilZ »

Sandy wrote:
Sun Jan 09, 2022 8:29 am
This makes sense to me but we don't have a separate equity account for savings The only unrestricted account we have is
01-3110-000. Can I use that account? Should I set up an equity account for savings? If so how do I do that?

Thanks,
Sandy
There's no need, you can use the 01-3110-000 which is the default unrestricted net assets account.
Neil Zampella

Using PC+ since 1999.

Sandy
Posts: 49
Joined: Sat Jan 01, 2011 9:44 pm

Re: transfer to savings for a release acct

Post by Sandy »

Thank you that worked.

Now when I enter interest earned would I use the same transaction after posting the interest?

I record interest as follows:

01-1211-001 debit $15.00
01-4510-000 credit $15.00

So then I think I should do the following to show the interest earned in the restricted acct.

01-3110-000 debit $15.00
01-3212-000 credit $15.00

Thank you for all your help
Sandy
Sandy Daniel
Always learning and always grateful!

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: transfer to savings for a release acct

Post by NeilZ »

Sandy wrote:
Tue Jan 11, 2022 10:18 am
Thank you that worked.

Now when I enter interest earned would I use the same transaction after posting the interest?

I record interest as follows:

01-1211-001 debit $15.00
01-4510-000 credit $15.00

So then I think I should do the following to show the interest earned in the restricted acct.

01-3110-000 debit $15.00
01-3212-000 credit $15.00

Thank you for all your help
Sandy
I'm assuming that 4510 is for interest income, right? If that account covers income to the savings account then if you want all the income from the entire savings to be added to the restricted account, that would be correct. If you just want the interest to collect in normal savings, there's no need to do that.
Neil Zampella

Using PC+ since 1999.

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