User Support Forum

I am entering in the first month's worth of transactions for a new entity with a non-standard chart of accounts.

I'm struggling to understand how the Account Payable module works?
(1) Where do I input the vendor's invoice date? (I only see "Due Date")

(2) When one sets up Vendors, one chooses an expense account to debit. That makes sense to me. But why select a cash account for posting rather than an accounts payable account? I do not understand how PowerChurch will handle outstanding vendor invoices if they are not paid by the time the month's transactions are posted. Does it automatically post them to A/P and then reverse that entry later when the payment is made?

(3) The first expense of this entity was ordering checks. The charge was debited directly from the bank account. I set up the vendor, then I entered an invoice. I went to "Maintain Manual Checks" and filled in the EFT debit info and then selected "Post now" and then clicked "Save". The invoice is still there in the list in "Maintain Open Invoices" > List, and when I look at it, it says, "A check has not been printed for this invoice". Why? What should I do differently?

Thank you,
Eric

EDIT: (4) Once PowerChurch knows that a check has been written for a given invoice, I assume that invoice will no longer be in the "Open Invoices" list, right?

PowerChurch Plus 14 (can't find the precise version #)

BBS wrote: ↑

Fri Dec 23, 2022 3:26 pm

I am entering in the first month's worth of transactions for a new entity with a non-standard chart of accounts.

I'm struggling to understand how the Account Payable module works?
(1) Where do I input the vendor's invoice date? (I only see "Due Date")

I take it this is the first time you have used the AP module. You're making it harder than it is.

I usually enter the type of bill I received in the Reference block: IE: STMT: 2022-12-24, or INV: 2022-12-23. This is more a reference for you, the system does nothing with it.

(2) When one sets up Vendors, one chooses an expense account to debit. That makes sense to me. But why select a cash account for posting rather than an accounts payable account? I do not understand how PowerChurch will handle outstanding vendor invoices if they are not paid by the time the month's transactions are posted. Does it automatically post them to A/P and then reverse that entry later when the payment is made?

Do not confuse ACCURAL accounting with CASH or FUNDS ACCOUNTING. FWIW .. for the term INVOICE substitute BILL. Then think like you're paying your own bills from your checking account. A church and a lot of charities run on cash, you pay directly from the checking account, just like you do at home. You enter the bill, and you pay it when it comes in.

When you Post Accounts Payable, you are going to see a list of the invoices in the AP system. All of which have had a check, whether computer printed or manually entered, to pay them. Nothing is 'automatically posted' as they stay listed in the Open Invoices. Frankly, even bills that have had a check written against them stay in Open Invoice until you manually post, you can't change them however. After you post, the only invoices left under Maintain Open Invoices are the ones that have not had a check printed against them

(3) The first expense of this entity was ordering checks. The charge was debited directly from the bank account. I set up the vendor, then I entered an invoice. I went to "Maintain Manual Checks" and filled in the EFT debit info and then selected "Post now" and then clicked "Save". The invoice is still there in the list in "Maintain Open Invoices" > List, and when I look at it, it says, "A check has not been printed for this invoice". Why? What should I do differently?

Basically, delete the bill you entered in Maintain Open Invoices. Bills that are paid by direct debit, or credit card (and you should read in the manual about creating liability accounts for credit cards, I suspect you'll need it) are entered directly into the system through the Maintain Manual Checks function. This essentially creates the bill in the system and lists it in the vendor history. That said, in v12 (I believe) they added an option at the top right of the Maintain Open Invoices window to covert the entry to a manual check. This helps when people are entering bills and find one in the middle that was automatically paid by direct debit or credit card. They can enter it on this window, click on that button, and convert it, without leaving the window.

Thank you,
Eric

EDIT: (4) Once PowerChurch knows that a check has been written for a given invoice, I assume that invoice will no longer be in the "Open Invoices" list, right?

PowerChurch Plus 14 (can't find the precise version #)

As I listed above, it will still be in the Open Invoices list, they will show a check date and number with a button where you can view the check. You can still edit the accounts and the amounts debited or credited to the accounts. This comes in handy when you created an invoice for a vendor, but instead of debiting its usual expense account, a different expense line should have been used. Unfortunately you can also change the amounts on those lines too, so one needs to take some care when editing the invoice to fix such things.

Once they have been posted, they are no longer in that list.

NeilZ wrote: ↑

Sat Dec 24, 2022 9:53 am

Do not confuse ACCURAL accounting with CASH or FUNDS ACCOUNTING. FWIW .. for the term INVOICE substitute BILL. Then think like you're paying your own bills from your checking account. A church and a lot of charities run on cash, you pay directly from the checking account, just like you do at home. You enter the bill, and you pay it when it comes in.

Hi, Neil,

Thanks for all your input. Wonderful help. I was trained in accrual accounting. Yesterday I finally came to the understanding that by default the PowerChurch system is a cash basis system and accounting period adjusting entries need to be entered to get accrual reports that comply with Generally Accepted Accounting Principles (and those adjusting entries would be reversed at the beginning of the next period). I guess I used to know that PC+ is basically cash basis since I used it about 30 years ago, but I had forgotten. I think we were doing accrual-basis reporting, but I cannot recall for sure now.

I think the PC+ system is great, and I agree that the cash-basis method for day-to-day is fine, probably the absolute BEST for church and NPO accounting. It simply was a stumbling block to me that bills to be paid were not being posted to Accounts Payable, but rather to the Cash in Bank account – i.e., they don't really get posted in the General Ledger UNTIL they are paid. Now I get it. If we need accrual accounts at year end, we can do an entry to get the amounts right by

   Debiting expenses reflected in Open Invoices in the A/P module
      Crediting Accounts Payable

for any bills that are in the PowerChurch Plus A/P system but have not been actually paid by December 31.

Then in January we can reverse that.

Some of the other things I was dealing with are just the implications of getting my mind around the way PC+ works.

I am entering in everything for 2022. I have inputted the first three months, posted from the various modules and posted to the Fund Accounting module (General Ledger). All looks good so far and I'm figuring out how things are working.

I really appreciate your input! If you think of something else maybe I should know before I go too deeply, please let me know. Thank you!

Merry Christmas!
Eric

BBS wrote: ↑

Sat Dec 24, 2022 11:03 am

If we need accrual accounts at year end, we can do an entry to get the amounts right by

   Debiting expenses reflected in Open Invoices in the A/P module
      Crediting Accounts Payable

for any bills that are in the PowerChurch Plus A/P system but have not been actually paid by December 31.

Then in January we can reverse that.

Frankly, there shouldn't be anything left over in the system. If they came in December, they should be paid in December. The only issues are things like credit card purchases, and as I pointed out, if you setup a credit card liability system, when the CC receipt comes to you, it should be entered with the debit going to the proper expense line, and the Credit going to the liability account. The funds are moved in 2022, but the bill comes in 2023. You pay with the funds listed in the liability account. The P&L or I&E for December shows the expense, not January.

This is why I actually suggest that churches who use a credit card setup that liability account, those funds cross funding years, since they've already been accounted for.

Having worked with churches on PCPlus since the late 1990s .. I've not seen an instance where there was such a need for any type of year-end accrual.

Some of the other things I was dealing with are just the implications of getting my mind around the way PC+ works.

I am entering in everything for 2022. I have inputted the first three months, posted from the various modules and posted to the Fund Accounting module (General Ledger). All looks good so far and I'm figuring out how things are working.

I really appreciate your input! If you think of something else maybe I should know before I go too deeply, please let me know. Thank you!

Merry Christmas!
Eric

I note you mentioned GAAP ... most churches do not use GAAP reporting as its not needed for normal day-to-day use. Mortgage lenders may require a GAAP report, but that can easily be created.

Here's a good article I pass on to people about this: https://www.churchcpa.net/blog-post/con ... rual-basis