Help - PR question

[peabodyumc]

I have this set up but think I have it set up wrong. Our pastor had the option of enrolling in a flexible spending plan through the church conference. She has $65 deducted from each check (twice a month) and I send $130 once a month to the conference.

So this is how I handle the transaction when I do payroll:

Credit:
01-1110-004 - General Fund 1377.00
01-2270-000 - Insurance WH 65.00

Debit:
01-5061-00 - Pastor's Salary 1442.00

So when I pay the conference this is how the transaction looks:

Credit:
01-1110-04 - General Fund 130.00

Debit:
01-5066-00 - Pastor's FSA 130.00

So when I run reports I am showing a growing balance in the Insurance WH liability account. I am also showing a growing balance in the Pastor's FSA expense account.

I finally had the chance to start looking at this and I think I obviously have a problem but i can't figure out where it is. I thought that maybe I should credit the liability account for $130 rather than the general fund when I pay it but then realized I have already credited the liability acct. Since I am paying this it is no longer a liability is it?

I have the same problem with fees a wedding couple had to pay for the custodian. I must have done the same process as I have a liability balance of $50 for fees although I already paid her.

Okay - I just went to look at this a little more before submitting this. Based on the regular payroll it looks like when I do payroll it should possibly look like this:

Credit:
Credit:
01-1110-004 - General Fund 1377.00
01-2270-000 - Insurance WH 65.00

Debit:
01-5061-00 - Pastor's Salary 1377.00
01-5066-00 - FSA Expense 65.00

Then when I pay it rather than debiting the expense account I would debit the Insurance WH liability account. However, it looks like I am missing a payroll item to accomplish this. Can someone please enlighten me?

Thanks!

Laurie

[Matt]

Laurie,

Your payroll items are ok. You just need to change the account you debit when you pay the FSA withholding to the conference. This is how your accounting should be working in this situation:

1) Cut payroll check for your pastor:

Credit:
01-1110-004 - General Fund 1377.00
01-2270-000 - Insurance WH 65.00

Debit:
01-5061-00 - Pastor's Salary 1442.00

2). Pay FSA Withholding to the conference:

Credit:

01-1110-004 - General Fund 130.00

Debit:

01-2270-000 - Insurance WH 130.00

Matt

[peabodyumc]

So I don't need to worry about expensing the item? I know it isn't a budgeted item but I figured I should be showing it somewhere since it isn't going to be on her check. If I don't I guess that is okay!

Thanks!

Laurie

[lincolnda]

Maybe you could look at it as part of the salary, which has already been budgeted, has been diverted to a different destination, but since it came from the salary, you don't have to budget it??? We have something similar here with our Secretary's 403B retirement. and do it exactly the same way as in Matt's example, with the check to the retirement account once a month equal to the accumulated withholdings showing in the liability account.