Refund a Contribution

[calvaryfellowship]

I need to refund a contribution that was made in March. Need help with the transaction.

I need to make sure the contribution does not show on their statement so I figured I would do a contribution to the negative on the same date w/same check so as to cancel it out.

Now I have to write a check to the contributor and am not sure what to debit and credit. It seems both credit and debit would be to my operating checking where the offering went in the first place.

Will this mess up my month end accounting since my first transaction w/be posted for the month of March and the next transaction posted for April?

Thanks!

[wms7328]

To reverse the contribution, go to View Posted Contributions in the Contributions menu. Find the contribution you want to reverse and simply hit the reverse key at bottom of screen. This will automatically enter the negative amount on same date as original contribution to cancel or reverse the original contribution. When you post this, select update contributions only so it won't transfer the reversal to fund accounting.

If you are using AP section, then enter a payment to the individual. The transaction will credit your checking or asset account and then debit the income account where the contribution was originally posted. You might want to record a note to give the details of why this check is being written so your auditor will know why the payment was made.

You can post the check in same month as the contribution if you want them to cancel each other in same month. The posting month in fund accounting will not effect the contribution reporting which uses the contribution date.

[NeilZ]

To reverse the contribution, go to View Posted Contributions in the Contributions menu. Find the contribution you want to reverse and simply hit the reverse key at bottom of screen. This will automatically enter the negative amount on same date as original contribution to cancel or reverse the original contribution. When you post this, select update contributions only so it won't transfer the reversal to fund accounting.

This is true for version 11, but not in version 10 and earlier. What she did in entering the negative contribution is the correct way to do this. However, as you noted, you do not want to post this to funds accounting.

[calvaryfellowship]

Thank You...I appreciate the help!

[calvaryfellowship]

Ok, I've run into a problem while balancing out for the month. I have evidently released from the temorarily restricted acct. twice the amount I was supposed to. When I "reversed" the contribution, did it automatically release that amount from the restricted account the contribution went to? (I only updated the contribution module)

I didn't think it did so when I wrote the check to the donor to refund her contribution I released the funds from the restricted acct. I'm thinking I should not have.

My dollars (checking acct) balance,it is my temporarily restricted account that is showing a negative balance.

Any thoughts?

[JohnDMeyers]

You need to correct this in Fund Accounting.

You can check under View Posted Transactions to see if your transaction is listed. If it is, you can hit the REVERSE button.

If it is not, you will want to get the account number for the Release of this particular restriction, and do the following:

CR 01-4810-000 Particular income release $amount-of-mistake
DB 01-4999-000 general release $amount-of-mistake

[calvaryfellowship]

Thank you for the response. May I ask you, so I do not do the same again (although it does seem highly unlikely to have this particular situation pop up again), when I reversed the contribution in the contribution module did it pull that amount out of the temporarily restricted acct so I did not need to manually do this when writing the check for the refund?

I appreciate the fix but always like to know the "why" behind it.

[JohnDMeyers]

The release is done when you spend the money, not when the contribution comes in.

If a contribution is recorded improperly and later reversed, that clears up everything back to zero.

Does that make sense?

[NeilZ]

FWIW ... if you reverse the Contribution in the Contributions Module, then Post to Funds Accounting, the proper reversing transactions will be created and sent over to Funds Accounting. Just doing the Contributions reversal will not change anything in Accounting.

In Funds Accounting, you then have to post those Transactions, along with any other Funds Accounting transactions you may have.

In your case, you are reimbursing someone from Contributions. As I mentioned above, I would not have posted the Contributions to Funds Accounting, just to the Contributions module, then cut the check out of Funds Accounting which would straighten out that area.