New Savings Acct with Some Restricted Money

[mccauleyjean]

I want to set up a new savings account in my existing Chart of Accounts for a $5000 starting balance. But $1300 is “restricted” money because it was contributions specifically earmarked for specific accounts. The other $3700 can be used to meet day-to-day expenses if we need to, but only in an emergency. All the money in this savings account is separate from the regular income and expenses set up at the start of the budget year closing to our checking account.

How do I set this up in PCP Version 9?

I understand that I am supposed to set up separate Equity Accounts for the Restricted Accounts that close to this new bank savings account.

But when I enter the new savings account into the Chart of Accounts do I use the full balance of $5,000 or just the amount freely available for day-to-day operations (the $3700)?

And when I print out the Income and Expense Report for the month is the restricted money included in the saving account balance or only the money we actually have available to spend for day-to-day operations?

Thanks for any guidance you can give.

[Zorak]

Your savings account will not reflect the difference between the designated and non-designated totals. The amounts should be reflected, as you said, in separate equity accounts.

There is an option under the Fund Accounting menu, Maintain List of Donor Restrictions. Clicking the Add button there will begin an assistant that walks you through each step of the process.

Once this restriction has been set up in the system, to get the balances in where they should be, you would need to enter a transaction that looks like the following:

savings account - $5000 db
unrestricted equity - 3700 cr
restricted equity - 1300 cr

If the money is already in your system, being transferred from another account, that would change the transaction a little. If the money is currently sitting in checking and unrestricted equity, then you would want to:

checking account - $5000 cr
savings account - 5000 db
unrestricted equity - 1300 db
restricted equity - 1300 cr

As always, if you have an accountant at your disposal, that would be your best bet for accounting advice!

[mccauleyjean]

I talked about this with a retired person at my church that has used other software similar to PCP. She understands “Fund Accounting” but did not know how to set this up in PCP. My idea was to go through the “Maintain Chart of Accounts” screen by adding a new account. Using the “Maintain List of Donor Restrictions” screen is the better way to go.

[Zorak]

Right. That allows you to add the donor restriction as well as all the new accounts to be associated with it.