Medical Insurance...we have an HRA(health reimbursement account) medical plan for 2 of our employees.
Because of that we promise, as their employer, to pay the first $5000 of their medical expense.
Therefore we have to setaside $10,000 for that purpose and use it as the bills come in.
Would I create another fund (because this is designated $) or
should I put it with our Liabilities?
Actually, you would put the $10,000 in an Asset account until you spend it.
If you have a separate account at the bank, then create another bank account number in PowerChurch.
If the $10,000 is sitting in your checking account, just create a sub-account under checking. (That's what I would do). Something like 01-1110-001 HRA
To keep track of how much of the $5,000 you have used toward Employee A, this is what I would do.
Create a GROUP ACCOUNT, level 4, HRA EXPENSE 01-5400-000
Under that, create detail accounts for each employee.
Employee A, detail expense, level 6 01-5402-000
Employee B, detail expense, level 6 01-5404-000
or
use sub-accounts:
Employee A, detail expense, level 6 01-5400-001
Employee B, detail expense, level 6 01-5400-002
When you pay a bill for Employee A:
CR 01-1110-001 HRA
DB 01-5400-001 Employee A
That way, your HRA money comes directly out of checking without any extra account transacting.
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