Bounced Checks

[El Bethel Office]

Hi


Our church is trying to become more efficient in managing the database. Unfortunately, we never reconciled the bank account records in the database, but we are trying to learn the process presently.

When we come across returned checks on our bank account that have been posted in the Contributions Module, I was confused on how to handle it properly.

Do I reverse the contribution and then post it as a negative amount with a note that it bounced or is it completely reversed and deleted? If deleted, how does the database account for the change?

Thank you

[JohnDMeyers]

You first reverse the contribution. To do that, go to:
Contributions / View Posted Contributions

Locate the contribution in the window and click REVERSE. This places the reverse entry in Unposted Contribtutions. Then, you Post in Contributions and Post in Fund Accounting.

To deal with the bank fee if there is one:
Fund Accounting / Enter Transactions
CR 01-1110-000 checking $25.00
DB 01-5670-000 bank fee $25.00

To reconcile the bank account:
Fund Accounting / Reconcile Bank Accounts
1110
Date of Statement
Amount on Statement

On the next screen, in the top window are the deposits. Use the space bar to click each one that appears on your bank statement. A "C" will appear for "cleared" the bank account.

On the bottom window are all of your checks and deductions. Use the space bar to click each one that appears on your bank statement. A "C" will appear for "cleared" the bank account.

You will probably end up with something other than zero difference at the bottom. Click POSTPONE. When you click DONE, all the "C"s become "R"s (for reconciled). You're not ready to do that, yet. When you click POSTPONE, all the "C"s remain "C"s.

Go back into Fund Accounting / Enter Transactions, and make necessary entries into the bank account to match the bank statement and POST them in Fund Accounting. If you don't POST them, they will not show up in the reconcile window.

Go back into the reconcile window and "Clear" the new entries.

Repeat until you have a difference of zero on the bottom. Then click DONE.

It takes awhile, but we've all been through it. The more you do it the quicker and easier it becomes!

[El Bethel Office]

Thank you


If you neglect to reconcile bank accounts in the database, how does this affect the overall account integrity? Will account balances fail to be accurate? Will reports fail to be accurate?

[JohnDMeyers]

The problem with not reconciling is that you never really know how much is in your bank account if you are going by the account balance in PowerChurch.

For example, let's say you have $1,389.65 in your checking account.

Someone makes an entry of $100.00 but mis-types it and enters $1,000.

You now show $2,389.65 in your checking account instead of $1,489.65. This only gets worse over time.

The only way to catch these errors is through reconciliation.

[El Bethel Office]

Thank you very much. Unfortuately, we did not keep up with bank reconciliation and our numbers seemed to have been getting worse over a period of time and now we realize why that is the case.

We have a project to go back and clean up everything that had been neglected. The problem now is that we already closed out each month go back to 2010. Will this prevent our data from reconciling?

There was one entry that I am quite unsure how to handle. There was a purchase made by someone in the music ministry and they had preferred to just receive a contribution credit instead of a reimbursement. I looked back on this entry and made a mistake by adding a contribution for this person, but also made an entry that he was paid a reimbursement. How could I go about retifying this entry; especially now that the month is closed (2011)?

[El Bethel Office]

Additional question

When a contribution check bounces with our bank account, are we suppose to delete the entry or are we suppose to reverse and save it as a negative value.

ex: 150 entry bounces

reverse to -150.

I might be way off on that idea, but wanted to clarify before I make more mistakes.

Thank you

[NeilZ]

Additional question

When a contribution check bounces with our bank account, are we suppose to delete the entry or are we suppose to reverse and save it as a negative value.

ex: 150 entry bounces

reverse to -150.

I might be way off on that idea, but wanted to clarify before I make more mistakes.

Thank you

In PCPlus v11.x, you can REVERSE a Contribution without having to do the old 'add a negative contribution' entry. When you post, the system will create the proper transaction to correct the Funds Accounting entries. You'll still have to enter a transaction to cover any bank charges.

To reverse the contribution, go into Contributions -> View Posted Contributions, pull up the contributor in question, then find the contribution, highlight it, then click on the Reverse button.

[El Bethel Office]

Thank you very much.

Unfortuately, we did not keep up with bank reconciliation and our numbers seemed to have been getting worse over a period of time and now we realize why that is the case.

We have a project to go back and clean up everything that had been neglected. The problem now is that we already closed out each month go back to 2010. Will this prevent our data from reconciling?

There was one entry that I am quite unsure how to handle. There was a purchase made by someone in the music ministry and they had preferred to just receive a contribution credit instead of a reimbursement. I looked back on this entry and made a mistake by adding a contribution for this person, but also made an entry that he was paid a reimbursement. How could I go about retifying this entry; especially now that the month is closed (2011)?

[JohnDMeyers]

I would reconcile everything to January 31, 2013. Use the bank balance on that date.

If you still have Jan 2013 open, make all of your corrections for 1/1/2013. If not, make them on 2/1/2013.

As far as the check in 2011. Void it, and post it in January or February of this year, and it will reconcile ok.

[El Bethel Office]

Do I delete the reverse transaction or post it as a reverse? (see below)


El Bethel Office wrote:Additional question

When a contribution check bounces with our bank account, are we suppose to delete the entry or are we suppose to reverse and save it as a negative value.

ex: 150 entry bounces

reverse to -150.

I might be way off on that idea, but wanted to clarify before I make more mistakes.

Thank you



Answer:
In PCPlus v11.x, you can REVERSE a Contribution without having to do the old 'add a negative contribution' entry. When you post, the system will create the proper transaction to correct the Funds Accounting entries. You'll still have to enter a transaction to cover any bank charges.

To reverse the contribution, go into Contributions -> View Posted Contributions, pull up the contributor in question, then find the contribution, highlight it, then click on the Reverse button.

[NeilZ]

Do I delete the reverse transaction or post it as a reverse? (see below)


.

Once you do the reverse in Contributions, you then post contributions as you would normally to Funds Accounting.