A Question about Tithing

[DCMI]

Greetings all...

Our church, as I'm sure most of yours do, tithes to our Pastor's church in another state, as well as supporting other missionaries around the world...Since we're new to Powerchurch, I am wondering if any of you educated users of Powerchurch can give me a pointer as to how to set this up with the fund accounting.

Since we're sending checks, do I have to make them a "vendor" and send it to them that way? Or, is there another way to do this?

Thanks for your help...

[JohnDMeyers]

Every check that you print from the computer will first need a vendor account created.

You can create the default accounts in the vendor record.

I would set up the Pastor's tithe in Payroll (if you are using the Payroll module for payroll). The payroll item would also have default accounts.

The first step is to go to Maintain Chart of Accounts. If you are using the default chart of accounts, then use the numbers I am suggesting:

In the Chart of Accounts:
ADD 01-2202-000 Owed for Pastors Tithe (liability account)
ADD 01-5066-006 Pastor Tithe (expense account)

In the Payroll module:
Under Item Descriptions:
ADD Item: 2 - Deduction - Pastor's tithe
DB 01-5066-006
CR 01-2202-000


In Accounts payable:
set up a vendor with these default accounts:
DB 01-2202-000 (liability)
CR 01-1110-000 general checking

When you pay the payroll, a liability will be created, which is the tithe that is owed to another organization. When you pay the vendor, the liability will be eliminated.

You will enter 100% of the Pastor's salary as the gross, and manually enter the tithe in Item 2.

[DCMI]

Greetings...Thank you so much for your response...I'm not sure I understand totally why I need to use the payroll module for this...To help my understanding, I just want to make sure to let you know that this is not ME tithing, but it's our church tithing. Our church takes 10% of all monies that come in (i.e., contributions, misc. income, etc.) as a tithe that we send to another ministry. Are we talking about the same thing? I could see how the steps below would work if I'm setting up a payroll deduct for my personal tithe. Does this make sense?

I do understand about the the vendor thing though...I do see what you mean as to having to set up vendors for every check you write. That makes sense...

Also, what about our church's support for missions? Do you all have a suggestion as to how we would set that up in our accounting portion (i.e., chart of accounts)? Can I just set this up as basic Missions expense? That's what it is, right?

You'll have to forgive me. I'm not totally new to accounting, just church accounting (if that makes sense). Any help you all could offer would be most appreciated...Thanks again...

[JohnDMeyers]

Sorry, I misunderstood.

If you have a standard amount given to missions, you can set that up in the Contributions Module. We put 10% of General Tithes into a separate missions fund, because we have many incomes and expenses for missions.

In Contributions, if "Contribution Fund 100" is general contributions,
it may DB 01-1110-000 general checking
and CR 01-4110-000 general contributions

We have it set up so that Fund 102 takes 10% of Fund 100 and puts it in:
DB 02-1110-000 missions checking
CR 02-4120-000 missions income

Where Missions Fund 02 (in Fund Accounting) has its own Chart of Accounts.
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At the bottom of the Maintain List of Contribution Funds (in Contributions Module) you can create AUTOMATIC TRANSFERS at posting time.

You can create "Contribution Fund 102" (in Contributions Module) that takes 10% of Fund 100 and puts it in:
DB 01-1110-000 general checking
CR 01-4120-000 missions income

Or, if you wanted to pay this amount to another organization, change the CR account from income to liability:
In the Chart of Accounts, ADD
01-2015-000 Owed for missions

In Contributions, ADD Contribution Fund 102 that takes 10% of Fund 100 and puts it in:
DB 01-1110-000 general checking
CR 01-2015-000 Owed for missions

And create a vendor account that does this:
CR 01-1110-000
DB 01-2015-000