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Words cannot express how ignorant I am in accounting so excuse the poor explaination.

We would like to allocate 10% of all offerings to a fund that we call Sowing (6325-0000). At the end of each month, we would like to write a check based on the balance of the Sowing fund.

We have the following funds setup
- 100 General Offering
- 110 Member Offering
- 120 Non-member Offering
...
- 300 Sowing (General) - 10% of fund 100 goes to this item
- 310 Sowing (Member) - 10% of fund 110 goes to this item
- 320 Sowing (Non-member) - 10% of fund 120 goes to this item

Currently all of the 'Sowing' funds are set to Debit our bank account (assest) and credit expense 6325-0000 Sowing

When we print the check, it is setup to credit our bank account and debit 6325-0000.

Am I hot, warm, or cold in setting this up? Thanks for your help

victorypastor wrote:Words cannot express how ignorant I am in accounting so excuse the poor explaination.

We would like to allocate 10% of all offerings to a fund that we call Sowing (6325-0000). At the end of each month, we would like to write a check based on the balance of the Sowing fund.

We have the following funds setup
- 100 General Offering
- 110 Member Offering
- 120 Non-member Offering
...
- 300 Sowing (General) - 10% of fund 100 goes to this item
- 310 Sowing (Member) - 10% of fund 110 goes to this item
- 320 Sowing (Non-member) - 10% of fund 120 goes to this item

Currently all of the 'Sowing' funds are set to Debit our bank account (assest) and credit expense 6325-0000 Sowing

When we print the check, it is setup to credit our bank account and debit 6325-0000.

Am I hot, warm, or cold in setting this up? Thanks for your help

Actually, this is more an accounting issue, than a Contributions issue.

That said, it looks like when you set these Contribution Funds up, you have these posting to the correct Funds Accounting accounts.

And I can also infer from what you've said here, when you setup the Sowing Contribution Funds you entered the Automatic Posting data properly so they will automatically deduct the 10% from the corresponding Offering Contribution Funds so you don't have to do anything manual with these Sowing Funds.

Currently all of the 'Sowing' funds are set to Debit our bank account (assest) and credit expense 6325-0000 Sowing

Is there a reason you are bringing the money in through an expense account? When you write the check you said you would credit checking and debit the 6325-000 expense. This will result in a zero balance in the expense. You would usually only credit an expense account if someone was reimbursing you for something or you returned something to a store. (ie some people in a class write a check to reimburse the church for study materials.)

Typically when money is received, you would credit an income account. The income account can then be used to show you how much money you have received for each of the 'sowing' funds for a period.

URP ... glad you caught that Jeff ... I didn't catch that he mentioned expense account, and not income account as the Contribution Fund setup dialog mentions.

Jeff wrote:

Currently all of the 'Sowing' funds are set to Debit our bank account (assest) and credit expense 6325-0000 Sowing

Is there a reason you are bringing the money in through an expense account? When you write the check you said you would credit checking and debit the 6325-000 expense. This will result in a zero balance in the expense. You would usually only credit an expense account if someone was reimbursing you for something or you returned something to a store. (ie some people in a class write a check to reimburse the church for study materials.)

Typically when money is received, you would credit an income account. The income account can then be used to show you how much money you have received for each of the 'sowing' funds for a period.

So instead of setting the 'sowing' account up as an expense it should be setup as income. When the money comes in I'm debiting the bank account and debiting the 'sowing' fund and when we write a check we credit both of those accounts. Correct?

Should it close to an equity account such as Unrestricted Net Assets or should I setup another account? I believe this will depend on how I want to see the information. Am I on the right path?

You will most likeley need to set up an an income account for the 'sowing' account and an expense account for when you go to use the 'sowing' money. When money is received, you will debit the bank and credit the 'sowing' income. This will increase your bank and increase the income account. When you go to use the money you will credit the bank and debit an expense account. This decreases the bank and increases the expense account.

Every transaction needs to have balancing debits and credits. You can't know if a debit or credit will increase or decrease an account without knowing what type of an account it is. For example:

Income: 4830-10
Expense: 6325-000

Both are posting to: 3230-130

You can have the expense account close directly to the equity account for your designation. By doing so, you won't enter a 'release' transaction. Keep in mind that if you expense 'sowing' money to another account, the equity account will not show correct balance.

Not exactly to deal with your question, but if your Sowing Income account and your Sowing Expense account both have the same suffix (sub-account number), you can see the net effect on Sowing by running a report on Fund Accounting | Sub-Account Report.

It is easy to Manage your Chart of Accounts to do this. I believe that all the relationships automatically update themselves.

Al