User Support Forum

It seems like every year there is someone that makes a contribution that they want to make sure goes towards their totals for the current year but the money is not actually counted and deposited by the church until the next year.
Are there any suggestions about ways to handle that? I guess it only shows up as a discrepancy if I run reports from the Contribution module and compare with reports from accounting module.

DEbbie

debbieg wrote:It seems like every year there is someone that makes a contribution that they want to make sure goes towards their totals for the current year but the money is not actually counted and deposited by the church until the next year.
Are there any suggestions about ways to handle that? I guess it only shows up as a discrepancy if I run reports from the Contribution module and compare with reports from accounting module.

DEbbie

There's nothing you can do about it, unless the money came in after the 31st. In that case, the church should not be crediting them for a 2010 contribution.

That said, many times you can't deposit on the 31st if its a Sunday, all you can do is do a night drop, and the bank really won't process it until the 2nd anyway.

However, the deposit in Powerchurch should post to December of the previous year.

The two most common forms of contributions should be recorded according to a couple rules
found in Pub 526 under the section "When to Deduct."

UNCONDITIONAL DELIVERY: The time of contribution is considered valid when unconditional
delivery is made.
1. A check sent by mail is considered delivered on the mailing date, not the recieved date.
2. Credit card contributions are valid for the year the charge is made

For more information, read Publication 526 from the IRS.
When recording in PowerChurch, you can respect these rules by being careful as to what
month you post them. A check received in the mail on January 1 and postmarked before
the first was likely intended by the giver to be a prior year contribution and should be recorded
accordingly.

Generally, a check dated late December would be expected to arrive by mail within a couple days.
However, if the check writer is late in getting it in the mail and the postmark is early January,
then it must be recorded as a contribution for the present (new) year.

It is conceivable that a contributor post-date a check for early in the year and that
should be recorded in the new year. In other words, unconditional delivery is dependent
on both the date written on the check, and the date of postmark.

-Robert

I wasn't really concerned about tax laws or anything. I am just trying to figure out how it should have been stored in PC.

The last Sunday in December was the 26th. Money collected during that service was counted and deposited on Monday, Dec.27. However, there was a contribution made by a member throught their online banking. At this point, I am not sure when the check arrived at the church; i will have to find that out. But let's say that it legitimately came on Dec. 30. It would have been put into our church safe and then counted and deposited along with the offerings that were collected on jan 2, 2011. Apparently, the church member spoke to our financial secretary to make her aware of the contribution and the fact that they wanted it to be in their statement of givings for 2010. She did that and made a contribution entry for Dec 31 and posted it for December contributions.

so going forward, if I run a summary report of contributions for 2011, it will not match what is in fund accounting as general offering for 2011. I was just wondering if there was any good way around this.
thanks,
Debbie

debbieg wrote:I wasn't really concerned about tax laws or anything. I am just trying to figure out how it should have been stored in PC.

The last Sunday in December was the 26th. Money collected during that service was counted and deposited on Monday, Dec.27. However, there was a contribution made by a member throught their online banking. At this point, I am not sure when the check arrived at the church; i will have to find that out. But let's say that it legitimately came on Dec. 30. It would have been put into our church safe and then counted and deposited along with the offerings that were collected on jan 2, 2011. Apparently, the church member spoke to our financial secretary to make her aware of the contribution and the fact that they wanted it to be in their statement of givings for 2010. She did that and made a contribution entry for Dec 31 and posted it for December contributions.

so going forward, if I run a summary report of contributions for 2011, it will not match what is in fund accounting as general offering for 2011. I was just wondering if there was any good way around this.
thanks,
Debbie

Debbie ...

In a word, no.

The ideal way to handle this was to make a deposit (or night drop) on the afternoon of the 31st consisting of all contributions that were received and in the office as of that time. Close of business on the 31st is what we use as the cutoff for contributions here.

Is there a way to fix the deposit .. no. Is this going to throw off income reports for 2011, not really. If you try to match the income report from Funds Accounting to that of Contributions, you'll see a difference of x amount of dollars. As long as you can document the difference, its not a problem.

The problem is this. You should reconcile your bank account on 12/31/10 before closing the month (and hence, closing the year), which you apparently did not. If you did, you would have been off by "x" amount of the deposit. You would show it, but the bank would not.

You could "fix" it, so that it doesn't show on your reports by making a "negative income" entry, and documenting why you are doing it.

CR 01-3100-000 equity (bank deposit 2010)
DB 01-4100-000 general tithes (bank deposit 2010)

When you close 2011, the negative income will roll into the equity and cancel the entry, so to speak. It's merely a band-aid fix to get you through 2011. The real problem is in 2010, which cannot be changed if December is closed.

First let me say I am not an accountant (though I have read some books and have a CPA as a brother-in-law). As treasurer I have this problem every year. What I have done is create an asset account called "Collections for Deposit". When I received an offering for 2010 in 2011 (that is legitamit) I would enter the contribution as being received on 12/31/10 and modify the generated accounting entry as if it was entered on 12/31/10, DR the Collections for Deposit account (instead of the checking account) and Cr the income account. I would then create a 2011 entry when I actually do the deposit, to CR the Collections account and DR the checking account.

Accounting wise this may not be the best way to do it, however, my year end checking balance would be accurate as would my income statements and contribution module. The balance sheet also shows the contribution as a 2010 asset. There are probably other ways of doing this but it works for me.

debbieg wrote:It seems like every year there is someone that makes a contribution that they want to make sure goes towards their totals for the current year but the money is not actually counted and deposited by the church until the next year.
Are there any suggestions about ways to handle that? I guess it only shows up as a discrepancy if I run reports from the Contribution module and compare with reports from accounting module.

DEbbie

I struggle with the same problem at year-end every year....

One thing I've done is to make 2 separate deposits, for example this year on Jan. 3. One deposit is for items legitimately received in time for 2010 credit but too late to deposit in 2010; I post this in PC+ as a Dec. 31, 2010 event in both Contributions and Fund Accounting. The second deposit on Jan. 3 is the standard collection deposit for the first Sunday of January 2011. I follow this procedure even if there is only 1 item to deposit for late-2010.

So far, this has seemed the "cleanest" solution for us. But I'm eager to hear how others deal with this problem.

Eden

I leave the month of December open for a couple of days into January and tell our bookkeeper and the secretary who enters the contributions not to touch PowerChurch until I say so.

During that time, I only make 2010 entries and reconcile all bank accounts to the exact date of 12/31/10, even if the bank statements are not in (I go online and get the information there). That usually messes me up in January, too, since our bank sends us statements through the 7th of each month. ugghh.

Once all the contributions are in, and all the bank statements reconciled, and all the year-end entries made, I close out December and tell the bookkeeper and secretary that they can get back into PowerChurch.

I had the same 'issue' with my bank where the statement did not end on the last day of the month. I simply called the bank and requested the statement end on the last day since it was a business account. They changed it to the last business day with no problem.

I handle the contributions in a similar fashion as described previously.

Thanks for the various ideas. I think the main thing is just to make our secretary aware of this for next year. If she had told somebody that a check had come in the mail we could have taken care of the deposit separately. Unfortunately, the only way we found out was when the member mentioned it to the contribution secretary. by the time I found out, we were several weeks into January.

This is my punishment for all those years that I wrote checks to charitable organizations on Dec. 31.
debbie