Ok, I searched the forums and found 1 thread about this but I was a bit confused.
We are setting up 2 different discretionary funds, one for the rector and another for the associate rector. We decided that any monies collected that are designated to the discretionary fund will be collected and entered into the church's main account. I will then write a check from our general fund to Discretionary Account 1 and Discretionary Account 2.
What do I need to do to set this system up? Do I set up a contribution fund that posts to the general fund and create a set of accounts that will take money from the general fund and transfer it out of our books and into their separate accounts?
Go slow, I am not an accountant, simply the one that said....sure I will help with the money
I think my process for contributions to our Deacons fund may work for you - I am like you, NOT an accountant, so any more experienced feedback would be welcome.
Contributions:
Set up Contribution funds for each of your discretionary funds, that each post to a (separate) liability account. In my case, Fund 30 - Deacon Care Fund posts to 01-2305 - Due To Deacons Fund
Fund Accounting - to record contribution it looks like this:
Debit 01-1100 (Checking Account)
Credit 01-23XX (Due to Discretionary Fund 1)
Credit 01-22XY (Due to Discretionary Fund 2)
At the end of every month, I write a check to the Board of Deacons who maintain their own checking account. The transaction is as follows:
Debit 01-23XX (Due To Fund 1)
Debit 01-23XY (Due To Fund 2)
Credit 01-1100 (Checking Account)
That's pretty simple. And the Balance Sheet will show you if you've neglected to clear your "Due To" accounts.
However, if these Discretionary Funds are not part of the General Fund, and need to be recorded elsewhere (as in my case, contributions to the Memorial Fund are collected in the General Fund [01] then transferred to the Memorial Fund [06] which has a separate savings account) there are a couple more steps. Respond if you need more detail - this is getting lengthy!
