Pastoral Loan

Fund Accounting, Accounts Payable, Accounts Receivable, Payroll

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tampatreasurer
Posts: 10
Joined: Mon Feb 03, 2014 7:42 am

Pastoral Loan

Post by tampatreasurer »

The church has honored a request by the Pastor for a small bridge loan to help with personal expenses. We have structured the loan with auto withdrawals from salary with a balloon payment at the end of the term. Any suggestions on how to structure the account initially and how to deal with the pay backs?

NeilZ
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Location: Connellsville, PA
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Re: Pastoral Loan

Post by NeilZ »

tampatreasurer wrote:The church has honored a request by the Pastor for a small bridge loan to help with personal expenses. We have structured the loan with auto withdrawals from salary with a balloon payment at the end of the term. Any suggestions on how to structure the account initially and how to deal with the pay backs?
I did a search on "Personal Loan" and found this info in a thread:
johndmeyers wrote: If you want to record the "loaned amount" in Fund Accounting, it will look a little weird, since loaning money isn't a "normal" function of a church.

You could create a negative liability amount. A "positive" liability is money that the church "owes". A "negative" liability is money "owed-to" the church.

I will assume you cut a check to the staff member for $1000 in March for the "loan".
Date: 3/1/11
CR 01-1110-000 checking $1000
DB 01-2180-000 Staff Loan Liability $1000
(post in October, which is your current month)

You will have a negative amount in liabilities until all the payments are made.
I'm assuming that you've created a Other Deduction pay item in Payroll. All you need to do is set the Pay Item to point to the liability account. Thus when the payroll is run, the deduction will occur, and the loan repaid. Since this isn't 'new' income to the church, this will take care of any issue with showing 'double income' so to speak.
Neil Zampella

Using PC+ since 1999.

tampatreasurer
Posts: 10
Joined: Mon Feb 03, 2014 7:42 am

Re: Pastoral Loan

Post by tampatreasurer »

Thank you. That is very helpful.

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