Combine Bldg Fund Checking with General Checking

[sardcc]

I am considering the possibility of combining the Bldg Fund Checking account with our General Checking account. With the nice 'Restricted' feature in PC 9.0, it would allow us to keep track of the appropriate money designated for our Bldg Fund. Any donations (or transfers from savings accts) towards the building fund could be applied to the restricted account. And any expense going out for the new bldg could be released from the restricted account. I would like to hear both pro's and con's to combining these 2 checking accounts together. Currently our General Checking account is setup to print checks from PC, but our Bldg Fund checking is a manual process due to the type of checks we have. I thought it would be nice to eliminate the 'manual' check writing process and entry into PC.

[Matt]

There usually is no reason to have multiple checking accounts if you have your funds and accounts set up correctly. Having multiple checking accounts creates extra work and complexity, in my opinion. However, I have found that some churches like to have the physical separation of monies, even though it may not be required accountingwise. You will need to assess the feelings of your church in this regard before deciding to combine the accounts.

[Randy B]

One of the great things about this program is the ability to eliminate a lot of checking accounts. One reason you may want to have a separate checking account is you may be able to shift your building account to a money market account which would get you a higher rate of interest. Building fund accounts typically do not have many checks written from them and so they are good money market account candidates.

[Kristi]

We just opened two bank accounts at a new bank. I have not even made my first deposit and I do NOT like it.

It is so much easier to have a general banking account with a Building Fund. However, I have not begun using donor restrictions yet.

God bless you~Kristi

[sardcc]

Thanks for your input. Now, what will the entries need to be to complete the transaction (close the Bldg Fund checking, transferring to the General checking)? I will need to CR the Bldg Fund checking and DR the General checking. But what is the entry to place the money transferred from the Bldg Fund checking into the Restricted Bldg Fund Account? Do I need to do a second entry that will DR the Temp Restricted account (3210-101 Building Fund) and CR the Unrestricted Net Assets (3110-000 Unrestricted Net Assets)? Thanks in advance for your help!

[mikethekey]

We have a separate bldg fund but we have our monies combined into one checking acct. Our general fund is 01 and bldg fund is 09. Our Checking acct is 1111.

I initially added the operating checking acct to the bldg fund and it became 09-1111-000 as well as remaining 01-1111-000 for the operating fund monies. When I transferred the monies I credited the bldg checking acct, which was I think 1115 to bring it to zero, as follows; I credited 09-1115-000 and debited the new checking acct 09-1111-000. I am assuming that you have both accts in the same bank and that they can transfer the funds to the operating acct in one transaction.

From then on when monies come into the bldg fund, they get debited to 09-1111-000 and when bldg checks are made out the the checking acct is credited
09-1111-000.

on the other hand when operating monies come in, the bank acct is debited 01-1111-000 and operating checks are credited to 01-1111-000.

Hope this helps.

Mike

[sardcc]

We currently do not have the 'Building Fund' setup as a separate Fund (similar to your '09'). We do not have any need to do separate reporting, therefore we do not need a separate set of accounts. This simplifies things just a little, eliminating the need to transfer money to different funds. I thought it would be just as easy to keep the Building Fund money as 'Temporary Restricted' money. Currently money designated to our building fund is automatically allocated in the Bldg Fund Temporary Restricted accounts as soon as it is posted from the Contributions module. When we have building expenses we simply release the funds from our restricted account. Please let me know if we are on the right track, or if we need to consider setting up a new Building Fund fund.

[mikethekey]

I guess that would work just as well. However, should you need to have a separate budget and separate reports for the bldg fund, a separate accounting fund would be more convenient, I would think.

Mike

[sardcc]

I agree with you that we would need to setup a separate fund if we need to budget/report separate from our general budget/reporting. Thank you so much for your input.

But if we proceed with keeping it all in the General Fund, is the entry that will place the Bldg Fund money (that comes from the closed checking account) from the unrestricted to the Restricted account as follows:

DR Temp Restricted Bldg Fund
CR Unrestricted Net Assets