Which month to start...

[joelmulkey]

Hello,

I am the business admin. for our new church. I do not have much real world accounting experience, but I am nearing the completion of my degree in bus. admin w/a concentration in accounting, so I am familiar with terms,etc. Furthermore, I have spent a few weeks with the business admin. at our mother church learning PCP. We were a daughter church up unitl Jan. 9th of this year. So, our official first contributions received were on Jan 17. Our mother church kept our books as part of theirs and still do for now. Both churches fiscal years are the calendar year. Our plan for the transition is:

1.) Start depositing contributions into our bank account starting this Sunday, Feb. 6th.

2.) The mother church will continue to pay our expenses until our account is to a one month level of expenses.

3.) When our account gets to this level, we will then begin paying our expenses and paying our mother church back for covering us since this transition (when they were paying expenses and not getting our contributions).

I recently set up PCP, but I was wondering which month I should start with. I could just start with February since that's where we are, and our mother church has paid the expenses and received our contributions through January. However, this will cut off the reporting activity thus far in January and seem to mess with our budget a bit for 2011. I could go back and enter January's activities, since I can get the information easily from our former mother church. What do you guys think?

Also, should I keep a running liability of some sort to track how much we owe our mother church or simply send them a check and account for it as the appropriate expense?

Thanks in advance,

Joel Mulkey

[JohnDMeyers]

You could start PCP in Feb.

You don't have any actual expenses to compare to a January budget number, so you really aren't creating any problems.

Enter your account balances as of Feb 1 as beginning balances. You can create a liability of "owed to Mother Church" and give it a Feb 1 beginning balance.

This way, you won't need to find out the details of the transactions in January that led to the Feb 1 beginning balance.

[joelmulkey]

Makes sense - Thanks, John!