Setting up account cheapsheet

[financedepartment]

We set-up our accounts (2 savings, and one checking) which we pay out expenditures. We have tried to reconcile the accounts with bank statement, but we are coming out with negative balances. Is there a cheapsheet in setting up the basis accounts for recording account receivables, and account payables? We have no accounting experience. We thought PowerChurch would be straight-forward. That why we did not use Pearchtree. We are now getting assistance from an accountant. He knows GAAP General Accepted Accounting Principles, and not the Fund accounting that PowerChurchPro is based on. Are there some examples of setting up the accounts? We love the contribution module, and reporting. We thought that we could just add deposits, and debit expenditures. Thanks, Gene

[JohnDMeyers]

Although there are Accounts Receivable and Accounts Payable modules in PowerChurch Plus, they are based on "cash accounting" rather than "accrual accounting" methods. Your accountant will understand the implications of that.

As far as the negative balances when you reconcile - what was your starting point?

You need to have a point where your bank account balance equals your reconciliation amount in PowerChurch, even if you have to initially enter the beginning balance to get it equal. Once you have established that starting point, if you add everything the bank adds, and subtract everything the bank subtracts, you will arrive at the same amount as the bank.

Re-check your starting point.

[financedepartment]

I have printed out our Chart of Accounts. Assets' DB/CR is DB, type Group, category Asset, the Master account is type detail, db/cr is db, and category asset. Sunday Account is type detail, db/cr is db, and category is asset, and our tithes account is type detail, db/cr is db, and category is asset. Should not the accounts that we deposit money into, db/cr be cr? Thanks, Gene

[JohnDMeyers]

I see what you're thinking.

The Accounts Payable Module is used to pay bills. The Accounts Receivable module is used to bill customers for things like church school tuition, etc.

In your chart of accounts, you can only enter amounts into Detail accounts. They can be either debit or credit, depending on if money is coming in or going out.

A real simple example is this:

To make a deposit, (I'll make up some account numbers)
Debit 01-1110-000 Checking Account (detail account)
Credit 01-4110-000 General Tithes (detail account)

To show money coming out:
Credit 01-1110-000 Checking Account
Debit 01-5110-000 Some expense account

In general, when you debit (verb) a debit (adjective) account, the amount is increased.
When you credit (verb) a credit (adjective) account, the amount is increased.

When the verb and the adjective don't match, the amount is decreased.

Accounting 101 from a non-accountant.

[financedepartment]

John,

Thanks, for the explanation. I think I see it now. If we enter all our debits, and all our credits, when we substract the debits from the credits, the balance should reflect what is actual in the account, according to the bank statements. Gene