True Profit and Loss Report

[tenalea]

Hello, I have a question regarding financial reporting. I have been running the income and expense reports (usually by month) to show the pastor how our finances are looking. I thought this was a good report because it shows how much money comes in compared to how much money that we spent (I thought).
However, I just realized that the expenditures that are coded to a liability item are not showing up on these reports! This includes loans, car payments, credit cards, lease payments, etc., which means that we are not getting a good picture of profit/loss or income and actual expenses.
I have looked through the reports and I can't find one that will give me this information. I understand accounting principles may consider these differently, but we really need a report that shows how much money comes in and how much money goes out. Can you tell me how I would go about getting a report like this?
Thanks for the help!

[Matt]

To get the type of income and expense report you are looking for you would need to change your accounting procedures to be pure cash basis accounting. In pure cash basis accounting you would only record an accounting entry when cash was actually received or paid out. If cash was received the offsetting account would always need to be an income account and if cash was paid out the offsetting account would always need to be an expense account. You would no longer record entries that updated any liability accounts or an asset account other than cash.

[tenalea]

Hi Matt! Thanks for the reply and the info. on the cash basis system. This is not possible because we have to have reports that show what our assets and liabilities are. I also understand that Power Church is set up from an accounting point of view and processes information based on those views.
However, I wish that Power Church would also realize that churches need to have other types of information available to them. If I have to take this information and put it in an Excel spreadsheet to get the information I want, then Power Church isn't really working for me. I'm working for it.
I would really like to see some improvements to the reporting modules. Why would it not be possible to have another report that shows all income and expenses no matter what kind of account they are?
I also have a problem with the sub-account reports not carrying balances forward. Right now I have to print the report and manually write in what my last year's balance was and add and subtract the income and expenses for this year to get a current balance in that account. We could really use a lot more options in the reports area.
Again, I really appreciate the help that you've given me and I look forward to hearing back from you.

[Zorak]

If cash was received the offsetting account would always need to be an income account and if cash was paid out the offsetting account would always need to be an expense account.

There are some instances where this just isn't the case. Loan repayments debit a liability account for the amount of principle that is paid. That is money going out which isn't an expense. Pass through contributions will credit a liability account. That is money coming in which isn't income.

For a simple in & out, register type report, you may consider running a Check Register report, or an Account Activity report. The Income & Expense Statement will only be looking at Income accounts and Expense accounts and reporting the balances of transactions that have affected them.

[Matt]

Tenalea,

It is theoretically possible to get PowerChurch to produce the types of reports you are looking for and at the same time be able to produce a balance sheet showing the assets and liabilities. To do so would require making some additional entries when posting certain transactions and also changing how you have the close to accounts set up for the income and expense accounts, among other things. This solution might also be able to resolve the concerns you have with not being able to see the carry forward balances in the sub accounts. You need to keep in mind that the accounting procedures required to do this would not be considered generally accepted accounting principles (GAAP). This is why there are no reports in PowerChurch that contain what you are looking for. What you are asking for is a hybrid of pure cash basis and accrual accounting, which is not possible under GAAP. The accounting procedures required to do this type of accounting are rather complex and beyond the scope of this forum so recommend that you consult with a qualified CPA to help you get the system set up the way you want.

Matt

[tenalea]

Hi Matt,

Just wanted to say thanks for the feedback. I appreciate the help.

Tena