Merging with another church

[cbrown]

Our church is merging with another, smaller church. We will become a new entity, combining a UCC church and a Presbyterian church, with a new name. We have decided to use PowerChurch and not their version of Quicken. Whew! How do we merge their financials into ours? They have checking, savings, and restricted investments. I hope I don’t have to start over!

[NeilZ]

Our church is merging with another, smaller church. We will become a new entity, combining a UCC church and a Presbyterian church, with a new name. We have decided to use PowerChurch and not their version of Quicken. Whew! How do we merge their financials into ours? They have checking, savings, and restricted investments. I hope I don’t have to start over!

My advice is to have them close out those accounts as far as checking & savings, and deposit the funds into the current accounts you have in Powerchurch. If the investments cannot be transferred to your current broker, create new asset accounts to track in Powerchurch. Transfer as much of the checking as possible leaving enough to cover any outstanding checks, then when all have been processed, close it out.

Of course, you would keep the Quicken data (and program) for at least 7 years per IRS regs.

[cbrown]

Ok, I get that, but when I transfer the assets to PowerChurch, what does the transaction look like? It’s not like they are coming from a donor. Unless I set their church up as a donor?

[NeilZ]

Ok, I get that, but when I transfer the assets to PowerChurch, what does the transaction look like? It’s not like they are coming from a donor. Unless I set their church up as a donor?

It would be a deposit, entered via a Funds Accounting transaction, not through Contributions. This is the type of Funds Accounting transaction you would also do to add any accrued interest from any interest bearing checking and/or savings. You should have a income account setup called Interest to account for that. In this case you should also use your miscellaneous income account, to cover the CREDIT side of the transaction.

However if you need to have transparency to reflect the funds coming in, I would create a new income account, call it 'Merger Income' that would only be used for the deposits from their checking and savings. Yes, you'll have to maintain it for 7 years in the system, but it would allow you to show the funds being merged in.

So the transaction would look like this:

01-1110-000 Checking DB 1000.00
01-4199-000 Merger Income CR 1000.000

[cbrown]

That will be easier than I thought. Thanks again.