"Christian Ministry Finance Accounting" Goals or Objectives
Many Christ-Centered Ministry Bookkeepers (often they are both the Board Treasurer and its Bookkeeper - Bee Tees) at Smaller Churches and/or Missionary Organizations have little formal accounting training and we CPAs (and related professionals) MUST help them make full use of available Tools so that their efforts are as simple and yet as complete as possible. Paramount to this, in my view, is the complete and appropriate use of these Ministry Finance Internet Friendly resources.
Please Click Here for some "Fund Accounting" perspective and the distinctions between Board Discretionary Monies (General Purpose Fund) and Non Discretionary/Restricted/Designated Monies (Special Purpose Funds.). The Ministry leaders (and/or decision makers) must be timely provided with "Vital Signs" like the following:
--- How much money is on deposit or on hand
--- How much is REALLY available now for us to spend for a pre-approved purpose."
--- Who owes us money and how late are they
--- How much do we owe and are we current with our bills and like obligations
--- What Strings are Attached to any of this money; or it pertains to which part of our Ministry
--- What is the scope of Donor restricted money
--- What is the amount of Board discretionary money that is sometimes "SetASide" by the Board for a specific purpose.
--- Are we living within our General, or Operating, Fund Income and Budget Constraints
In pursuit of knowing what is the current financial status, a fundamental resource is to weekly use such Spending Control resources as found HERE. Ask us also about getting information about knowing what has happened during the past year in relation to what should have happened, etc.
Our prayer is that you find the following information of value and within context:
01 - You have complete information as to each Fund
The system needs to be designed so you can view its periodic Balance Sheet report and see the amount in each Fund or who belongs to Net Assets (Liquid Assets less Operating Liabilities). Please Click Here for more Info. Be sure that your accounting system that is designed to weekly answer this question mentioned above: "How much does the Ministry decision maker REALLY have to spend for Ministry purposes during this next week?"
Of course, this means that all known buying transactions are shown .... or, as indicated when you Go Here, you must show expenditures that have not yet flowed through the Bank Account.
Another issue is that you have the option of setting aside operations that have an annual emphasis, like "Land, Building and Equipment," and you do NOT include them in your every day accounting matters. Ask us at Brad@rpfin.org or Jim@bcidot.org about "Memo Reporting and/or Accounting".
02 - Pooled Bank accounts
The Ministry's written Finance Policies makes it clear that it does NOT allow separate Checking/Savings Bank Accounts for any Fund or Fund Group. Plus all non "General Fund" monies must have Board approval; Church Adult Sunday School Classes (or like Auxiliaries) especially are NOT permitted to have their own Bank accounts. The Board is always in charge - no "Pass Through" of money is allowed without Board approval as they make sure that all money is used for a Ministry's pre-approved purpose.
When a Ministry functions from a Pooled Bank Accounts approach it requires less Bank account bookkeeping chores, plus the Ministry should earn as much "Interest Income" as any good steward. Please Click Here and Here for more details on this topic.
03 - A single entry does the job
You establish your Fund Accounting system (the applicable infrastructure, often referenced as your Chart of Accounts) and related matters so that a single transaction entry provides you with what is needed. Or you make as few Journal Entries as possible to accommodate the peculiarities of the Fund Accounting process.
After you Read This please ask us if you have any questions about our position about NOT integrating people's Giving Records with the Fund Accounting software.
04 - Ease of setup and viewing of internal Financial Reports
You make the most of resources that provide you with the ability to go to the "Chart of Account" listing (like that
provided by QuickBooks - QBs) so that you can easily gain access to all of transaction details within that account or
Fund. From there you design/produce ''easy to access" repetitive reports that meets your needs.
05 - Spending Control (yea, Budget) Features
It is essential that all "Decision makers" timely have Spending Control (Budget) information. As for each "Special Purpose Fund", conclusions are almost always arrived at from the available Fund Balance - seldom from line item info. However, the "General Purpose Fund" reporting action is determined by individual Expenditure line item "Actual to Budget" data, etc. Be sure and Click Here for information about an alternative to the usual line item "General Purpose Fund Spending Control process.
06 - Fund Balance "Carried Forward" Issues:
As to fiscal year end features --- the computer accounting system needs to be able to accommodate such things
as the following:
a> The "General Purpose Fund" has a Fiscal Year only annual emphasis; Example --- --
unused authorized annual budget amounts for this year are not carried forward to the new
fiscal year, etc.
b> Each "Special Purpose Fund" , however, is in fact carried forward at fiscal year end
to future years since it does not have an annual (Fiscal year) emphasis. I trust that
the following QB process helps in such an effort: http://www.bcidot.org/qbb/0659-02.html
07 - A One-Page Condensed overview of financial information
The Ministry leaders are provided monthly with a condensed one-page (Click Here and see an Example) key item financial trends report of the entire endeavor. Often your accounting software can not provide such a condensed report, so it comes via an easily updated, but manually produced Excel document.
This should include a Ministry's fiscal year-to-date recap of all of its Income and Expenditures - including any "Actual to Budget" data, And then a current month end status report of its condensed liquid Assets, Liabilities and Fund Balances. Please Click Here for more information.
Written in November 2007 by CFO Brad Pendable - For more information contact Brad at Brad@rpfin.org or Retired Auditor CPA - Jim Bramer at Jim@bcidot.org . Uptd January 07, 2013