Colossians 3:23 -
Whatever you do now, work at it with all of your heart, as working for the Lord, and not for men.
Brad Pendable - CFO
RE: Dialog about the electronic "eFinFax" and "BuxBox" Issues ORIGINATED: July 2008
It seems that l frequently have Email dialogs with you BeeTees out there who serve Small Ministries. Somewhat like what Jim Bee has done when you Click Here, I have decided to depersonalize some of these interactions and share with "Alex" in this "2000-01" dialog format that follows. Let either of us know at Brad@rpfin.org or Jim@bcidot.org if you have comments or questions.
Brad, I am the combined Bookkeeper and Treasurer of our Small Church. You call those of us "BeeTees". I work in the retail industry and have a limited amount of accounting or bookkeeping training (I took an accounting course my first year in College). I do the family bookkeeping here at home and I have agreed to do what I can in this capacity at our Church. We have access to the Internet via a fast connection and I try to keep up with our kids who are using more and more Online Tools and getting more and more Internet Literate.
Yes, I am told by Jim Bee, and others, that more and more people (regardless of age) are getting what he calls Internet Friendly. Thank you for sharing.
Here is what I want to discuss with you. From reading Jim Bee's web site link content when I go to 0300 I find he believes that we all need to embrace what the Internet and related Online resources have to offer. I also find your free eBook Found Here very very helpful. In this way we are utilizing Contemporary Tools as we serve as Bee Tees at Small Churches like ours, or for any of us who serve in such a way at Small Christ - Centered Mission Organizations.
I also appreciate his thoughts found Here about "Why" we have" money and not necessarily "Where" we have it. Plus, I appreciate his comments found Here about a pool of money on deposit earning as much Interest Income as possible.
Actually it is my pleasure to have joined with Jim Bee in much of this endeavor. Let me give you some particulars:
>> Within context of the goals set forth when you Click Here , we believe that such BeeTees serving out there should be able to provide weekly financial reports to those who need to know if they have money to spend in their area at a Ministry As you know, every spending entity (whether it is at Ministries or Families ) needs to have such up-to-date information in order to be the God-honoring fiscal stewards that they should be.
>> Accordingly, we have embraced what is frequently called the Envelope method of finance record keeping --- we call it the BuxBox system utilizing older inexpensive versions, found on eBay, of the software known as QuickBooks Pro. Or every dollar that comes in is placed into a pre-determined BuxBox. This means that, regardless of how much money there is in the Bank, you can only spend what is in that specialized, or particular, BuxBox. Obviously, this is a unique type of a Spending Control or a Budget system.
>> I also trust you will be helped when you Click Here and learn from the free eBook that i co-authored called: "Journal to be Christian Ministry Finance "Internet Friendly".
Yes, I am very thankful for the Mvelope process that Crown Ministries recommends as I use it very effectively to handle our personal finances. It seems to conceptually make a lot of "Good Cents" to also use it in a Church setting. Those of us doing the buying at the Church can benefit by knowing this information each week. Please show me what a report would look like, Brad.
Below is what we call the electronic eFinFax provided "BuxBox Balances" weekly report as of May 14, 2xxx.
SPFund BuxBoxes 51 ABC Project $ 28.53 52 XYZ Project 405.57 59 GPF (-) deficit from Previous Yrs -2,706.41 59 Board Discretionary Fund 11,574.00 Total SPF BuxBoxes 9,301.69 GPFund BuxBoxes 01 Staff Costs $ 272.70 02 Missions Costs 28.65 03 Facility Costs 59.06 04 Church Office Costs $ 37.30 05 General Ministry Costs 44.88 Total -GPF BuxBoxes for this year 442.59 Total Year To Date BuxBox Balances $9,744.28
Wow, this report is great ..... but, I have some questions .....
That is understandable, Alex.
But first, let me point out that this report clearly shows you that there is $9,744.28 available to spend. But you will note that these "BuxBoxes" are divided up into two segments. There is the $9,301.69 segment that is "Spoken For", or it is Designated/Restricted money that is called "Special Purpose Funds - SPFunds".
This leaves only $442.59 in the 2nd segment -- Discretionary money -- for the usual operations of the Church which we call the "General Purpose Fund - GPFund." Of course, the $9,301.69 is "do not touch" money for the usual "General Purpose Fund - GPFund." costs at the Church.
But imprudently, this Church's leadership at this sample Church has allowed the expenses of the GPFund of previous years to exceed its income, which resulted in the above deficit of $2,706.41 -- or the Church used all of the Project and a portion of the Board Discretionary Fund monies to cover these deficits. Obviously, this is NOT GOOD !!!
How true !!! Which immediately brings to mind my first two questions.
01> How would you get the money back to the Projects and the Board Discretionary Fund", etc?
02> Also, how do you function weekly during the current fiscal year so that a deficit like this does not happen again?
Let me answer question 02> above first. As explained in depth when you Click Here, the whole purpose and concept of the BuxBox method is that Ministry receipts are posted to applicable BuxBoxes (or Envelopes or Fund Balances, if you please) when the money comes in. Such an effort is pretty straight forward, of course, when people give to the SPFunds -- like the ABC Project Fund, for example.
But the real value of the BuxBox system is that when GPFund money arrives it is assigned, per the leadership's sequential priority order, to applicable discretionary areas of the GPFund.
Let's say that a decision has been made to assign the GPFund receipts in the "01 thru 05 BuxBox" numbered order as displayed within the report above; or the first assignment is 01 - Staff Costs and the second is 02 - Mission Costs, etc. Once that BuxBox's need have been met, then the residual of the GPFund income is posted to the next sequential, or numbered, BuxBox, etc. You make it very clear that donors are NOT permitted to designate their donations to any of the GPFund "BuxBoxes"; it is the leadership, not the person making the donation to the GPFund, who decides the allocation of the GPFund receipts.
As to the second question ..... the usual action is to ask for your constituency to make Pledges to cover the GPFund losses of previous years, or the Church decides to use something like a Tithe of all GPFund money, in agreed sequential order, to cover this deficit.
Let me see if I understand your jargon and your explanation above, Brad -- or let me share with you this scenario in my words - - -
Money comes in for this week .... some of it is for the pre-approved restricted purposes like "Projects ABC, XYZ " plus the for coverage of "GPFund Losses of Previous Years".
Let's say that the deposit for the next week is $1,500.00 -- and the donor restrictions are: $100.00 for the "Project ABC" Fund; $50.00 for "Losses of Earlier Years" and one donor wants to direct their donation of $75.00 to the "02 - Missions BuxBox". As explained above, this donor is told that this $75,00 designation is not permitted and unless they want the money back it will be allocated to the GPFund at the leader's discretion, etc.
How we use the BuxBoxes system to account for the balance of $1,350.00 ($1,500.00 less $150.00) is primarily what you are talking about here. Let's suppose that we need $1,000,00 in the "01 - Staff Costs BuxBox" for the upcoming 05-15-X8 semi-monthly payroll, and since we already have $272.70 in this BuxBox, we assign $727.30 of the $1,350.00 here - which brings us to the needed total of $1,000.00 in that BuxBox. The remaining $622.70 ($1,350.00 less $727.30) is assigned to the "02-Missions Costs". Ultimately we will need $1,000.00 for this purpose later in the month per our "02-Missions Costs" commitment.
Let's further suppose that a involuntary (as apposed to voluntary purchase that we choose to make) utility bill of $85.00 comes in and we can only pay $59.06, or the amount in the "03-Facility Costs" BuxBox, etc. Obviously, as of this date, the existing BuxBox balances for "03 Facility Costs", "04 Office Costs" and "05 Ministry Costs" have had no receipt assignments and their BuxBox balances remain the same. Within this overall BuxBox context, I would hope that their existing balances could be moved to the "03 Facility Costs" BuxBox so the $85.00 could be paid. I also want to discuss with you the possibility of having a "Involuntary" BuxBox for such possible costs, etc.
Obviously we can make any voluntary purchases for any of the above 03, 04 and 05 GPFund areas only to the extent of their BuxBox balance, if any.
Your above scenario is very good, my friend. In the above process, you have just kept your books in such a way so that, if done consistently throughout the year, the Church will not have a GPFund deficit in the future. Yes, you will need to get familiar with the overall application of the BuxBox and this eFinFax system, but that is very doable !!!
When I do my own books I try to pay as many of my bills as possible by what some call the "Online Payment" method. Or I go the vendor's web site and set it up so that my repetitive bills are automatically either charged to our Bank Account or to our Credit Card account. Most vendors inform me by Email that this will or has happened. I plan to do the same at the Church, unless you say otherwise.
OK .... now tell me about the eFinFax system that we talked about earlier. My understanding is that this system would have us use some Contemporary Tools that enable me to use this BuxBox system quite efficiently.
It is encouraging to learn, Alex, that you plan to make full use of the Online Payment resources there at the Church.
OK, now that you have a good perspective of how the BuxBox portion works please go to 0300 again and digest in depth the contents of this entire web page ..... then we will delve into how to use the electronic "eFinFax" system within this context.
OK, Brad, I have done that. Now I have a much better overall view of this eFinFax system, but, as usual, I have a number of questions.
That is understandable. Let me give you some more input and then you ask me your questions so I can further assist you. Of course, a basic ingredient is that we all need to fully embrace what the Internet and related software has to offer along with the following factors or issues:
>> As the user, you need to be Internet Friendly as to the use of Online Tools, which I define mostly as those who access the Internet via a fast connection often via the probable use of a Laptop which allows them to access the Internet from anywhere at anytime.
>> Jim Bee would prefer that the electronic eFinFax user utilize older versions, since there is no reason to buy the more expensive newer versions of the software product known as QuickBooks Pro (QBs) I believe you can buy this out on eBay for something like $100.00 --- DO NOT obtain the QBs Non Profit version - as it is not needed. Continue to keep in mind that it is the principles of the electronic eFinFax system that is the emphasis here and not the software, per se. I understand there are software options like Mvelopes, or derivations thereof, that are eFinFax compatible as they ultimately reach most of our eFinFax provided Spending Control objectives --- even in somewhat different ways. Ask us for a worksheet where we compare the different software that can handle these electronic eFinFax matters.
>> The Ministry does the bulk of its buying using eCHECKS, but Credit Cards and the use of SCRIP cards are also options. Both all of the Plastic and your Bank transactions would flow via the Internet from your Financial Institutions (Banks and Plastic Credit Card providers) directly to the eFinFax system. Some would come automatically each day, others require you to go Online and transfer manually. You hand write as few checks as possible. You do NOT have the software (like QBs) write and process any checks -- remember, we are talking about Small Ministries here. The amount of your Bank balance and your Credit Card liability total, that appears on your eFinFax system, would always be equal to the balances shown by the Financial Institutions. See the 101, 102 and the 222 accounts in the sample "Photo Status" report below. This means you do NOT have to laboriously reconcile (Bank Rec, etc.) your entered dollars into your software to what they show, etc. A real blessing! Transactions not processed yet by the Financial Institutions (we normally call these 'Deposits in Transit' or 'Outstanding Checks') are timed so that they are non-issues, since you do all of this weekly.
>> Jim Bee and I expect to see that users of this electronic eFinFax system have remote Online helpers (Homers) to provide Bee Tees like you with the necessary assistance, etc. A way to do this is to safely and prudently permit someone to remotely view what is on the desktop -- another real blessing! Be sure we talk about a deaf Homer who is an excellent volunteer helper in all of this.
Now, before you ask your questions, please let me also provide you below with the eFinFax provided "Point in Time" report called the "Photo Status" report as of May 14, 2xxx:
Bank Accounts (As us about the Sweep System) 101 Checking Account 100.00 102 Savings Account 10,368.32 Total Bank Accounts $10,468.32 Fixed Assets 140 Equipment 15,633.00 141 Accumulated Depreciation -3,499.00 149 Net Equity in Equipment -12,134.00 Total Fixed Assets - Memo Only $0.00 Total $10,468.32 Liabilities 222 Credit Card Payable 724.04 299 Unpaid GPF bills $85.00 .00 Total Liabilities $724.04 Year To Date BuxBox Balances 9,744.28 Total Liab & BuxBox Balances $10,468.32
Further, please be aware of this eFinFax "Period of Time" wide report that we call the "Video Activity" report --- from the April 1, 2xxx through May 14, 2xxx"
|-- BuxBoxes-||BuxBox Bal||10-||Total for||50-||61-Salaries||74-Supplies||78-Facility||85-Travel||97-Else||Total Yrs||BuxBox Bal|
|1st of Year||Donations||this Year||Architect||& Benefits||& Exp||Lease Exp||Expenses||Expenses||Outflow||Year To Date|
|51 ABC Project||$ 700.||$ 87.||$ 87.||$ (759.)||$ (759.)||$ 29.|
|52 XYZ Project||$ 4,000.||$ 463.||$ 463.||$ (4,011.)||$ (46.)||$ (4,057.)||$ 406.|
|55 (Deficit) Prior Yrs||$ (3,362.)||$ 656.||$ 656.||$ (5,706)|
|59 Building Fund||$ 12,774.||$||$||$ (1,200.)||$ -||$ -||$ -||$ -||$ -||$ (1,200)||$ 11,574|
|Total 500 SPF Accts||$ 14,112.||$ 1,206.||$ 1,206.||$ (1,200.)||$ (4,770.)||$ (46.)||$ -||$ -||$ -||$ (6,016.)||$ 9,302.|
|01-Staff Costs||$ 562.||$ 1,211.||$ 1,211.||$ (1,500.)||$ (1,500.)||$ 273.|
|02 Missions Costs||$ 234.||$ 900.||$ 900.||$ (117.)||$ (988)||$ (1,106.)||$ 29.|
|03-Facility Costs||$ 56.||$ 750.||$ 750.||$ (747.)||$ (747.)||$ 59.|
|04-Church Office||$ 34.||$ 225.||$ 225.||$ (69.)||$ (12.)||$ (140.)||$ (222.)||$ 37.|
|05-Ministry Costs||$ 100.||$ -||$ -||$ (35.)||$ -||$ -||$ (20.)||$ (55.)||$ 45.|
|Total GPFund This Year||$ 986.||$ 3,086.||$ 3,086.||$||$ (1,500.)||$ (222.)||$ (1,001.)||$ (747.)||$ (160.)||$ (3,629.)||$ 443.|
|Total||$ 15,098.||$ 4,291.||$ 4,291.||($ 1,200,)||($6,270.)||($267.)||($1,001)||$ (747.)||$ (160.)||($9,645.)||$ 9,744.|
You will note, that we had to change the 'format and print size' above in order for you to see all of these details, but the message is:
>> For each BuxBox you can see what you "started with" at the first of the fiscal year
>> Then what "came into" each BuxBox, by type of Income, for the fiscal year to date
>> Then what "went out of" each BuxBox, by type of Expenditure, for the fiscal year to date
>> And finally you have the BuxBox "balance now" as emphasized in the earlier reports as of the fiscal year to date (May 14, 2xxx).
Wow again, Brad !! This information above certainly reduces the number of my questions. These eFinFax reports certainly provide anyone with all of the needed "FINANCIAL FACTS" of our Assets, Liabilities and BuxBoxes Balances (what we own, what we owe and which BuxBox belongs the the residual) at a "point in time". Of course, this is represented by the different types of BuxBox balances plus what was the Income and Expenditures, by type, within each of these BuxBoxes for the entire fiscal year or "for a period of time".
I would think that the last two reports would be needed like maybe monthly, while, of course, we need the "BuxBox Balances" report every week. This way we can know what our restricted fund balances are and we know if we have any money to spend for the indicated necessary ongoing GPFund activities.
OK, now tell me me why you have presented the "Equipment or Fixed Asset info" like this. Why do you have the "Equity" as an offset to the Asset accounts, etc.?
Well, we wanted internal readers to know this "updated once a year" information as to such non-liquid assets and the accumulated depreciation, but we did NOT want to co-mingle any of this with the essential liquid BuxBox Balance information. So we decided to show it, but to simply offset the Fixed Asset net worth, or Net Equity in this manner.
This is interesting, Brad. Here are my final questions:
>> How do I reflect the annual approved congregational expenditure operating budget within all of this ?
>> Tell me about doing the Donations record keeping -- am I correct in assuming the eFinFax does NOT include this? If not, why not?
As to the reporting of the annual approved budget matters, you can utilize the QBs budget feature and do the desired reporting. Or the periodic (probably every three months or so) "Budget to Actual" reporting can be manually placed into a worksheet (perhaps via a Excel document). But, regardless of the pre-approved annual budget, you, via this BuxBox feature of the electronic eFinFax system, can only spent what you have for said GPFund purposes.
With regard to Donation accounting. I firmly agree with Jim Bee to NOT integrate within eFinFax, etc. Please go Here and digest what he says about all of this. Especially about the preference that such record keeping should be integrated with a entirely separate "People" database. Again, the primary purpose of the electronic eFinFax accounting system is to assist you to control your spending.
When this "Unpaid GPFund Bills" situation occasionally happens, Alex, you simply change the name in the title of the "Unpaid GPFund Bills" account to include the current total for that week -- such as the $85.00 per the information discussed above. Another option for funding this is to move any existing BuxBox balances of 05 (General Ministry) or 04 (Church Office Costs) to the 03 (Facility Costs) BuxBox -- or, by journal entry, you make "To BuxBox - from BuxBox" reclassifications. Be happy to discuss this arrangement with you further.
OK ... thank you for sharing. This system sounds great! I'm ready now to get the Leaders approval and begin using this eFinFax system !!! Although I suppose I could begin at any time within our fiscal year, my preference is to make changes like this with the new fiscal year -- which is right around the corner. I will be in touch with you as to the specific steps to take and who I will be working with for the needed training and the review of our eFinFax system from time to time --- especially during the first few months in operation, etc.
Thanks for your Ministry, Brad !!!! I
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UPDATED LAST: March 02, 2013
Please contact Brad Pendable by Email at Brad@rpfin.org
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