Restricted Donor Accounts

[Sandra Michalscheck]

Do all the restricted donor accounts have to be created during the Account Setup phase of work? The way it is worded on p. 185 of the manual almost makes it sound that way. Or can more be added as time goes by just by staying within the numbered ranges and clicking the "This is a release account" button, and having them close to the proper accounts?

[Jeff]

To keep track of a donor restriction you need three accounts, an equity account to hold the balance, an income account to keep track of how much money has been received, and a release account to show the amounts that have been used. The maintain donor restrictions screen has an assistant to help you add the appropriate accounts for new donor restrictions, it will also help you setup the contribution fund so it updates the right income account as well.

[Sandra Michalscheck]

In the case of the "senior pastor gifts" example of a temporary restricted donor account that is in the 9.0 initial chart of accounts set up--

Since "senior pastor gifts" in the expense section of the chart of accounts has a note on it referring to using the money in the release account, I'm assuming that if I am going to use a restricted donor's account all the time for this payment, then I don't need the expense account for it at all. I just pay out of the release account all the time? Am I correct? So I can just delete the expense account that is labeled "senior pastor gift?" It is redundant to the release account? Assuming there are no other kinds of senior pastor gifts.

[Sandra Michalscheck]

Oh wait. I spoke too soon. So the release account is just releasing it back to be used. Then the actual payment transaction is from the expense account. I think I've got it now.

[Jeff]

You got it, the release account just tells the system that we used donor restricted money. In some cases when you use money it might not be an expense at all. For example if someone gives extra money to pay down the mortgage principle for example. When you spend the money it is a reduction of liabilities and not shown as an expense. The release transactions properly tells the system that restricted money was used to do that and to reduce the amount of restricted money shown.

Does that make any sense?

[Sandra Michalscheck]

Yes, it does. So in one case, after releasing the funds, I will credit the bank account and debit the asset account for the transaction. In the other case, I will credit the bank account and debit the expense account.

These restricted accounts will be an absolutely awesome addition to our program accounting when I have gotten on top of them!

Another question: I have built some other funds. 02 Mission, 03 Building, etc. Since there is no place I could see for putting in a beginning balance for these, I assume I'll just have to make a 1/1/05 four-part income transfer to each from 01? I figure this also means I will be able to delete one of these added funds in later years if I so desire now (after zeroing out, of course), without trashing the computer computations?

[Jeff]

You've got it exactly right.

The accounting setup assistant only sets up one fund. You can add other funds under maintain list of accounting funds. There is another assistant to help you quickly add the accounts needed to the new fund. To enter the balances to the new fund you will have to do that with a journal entry and if necessary transfer money from you general fund as well.

Deleting accounts is a little different. You cannot delete an account if it has a balance or there are transactions posted to it. So in other words, you will not be able to delete an account until you decide to delete ALL the accounting information for that period when the account was active. For example say you have a fund 10 that you stopped using in December of 2004. You will not be able to delete the accounts in that fund until you have deleted all detail prior to January 2005. So if your church wants to keep five years of accounting history, you will not be able to delete the accounts until 2010.

Version 9 gives you more tools to keep old accounts around. You can mark the account inactive; this will keep additional entries from being posted to the account. The reports are better about not showing accounts with zero balances and if needed you can now also move the account number to a different number within the same account type.

[Sandra Michalscheck]

Thank you. Getting there.

I've moved my next question to another post since I've changed topics.

Thank you for your help.

Boy, v. 9 is different from v.8.5--will be great, I'm sure. I like the new features. As soon as I get fully operational. I sort of miss having the beginning account balance area on the account dialog box.