One of my pet peeves: old accounts cluttering up my financial reports. As the ministry or business operations evolve, this is naturally reflected in the chart of accounts. The problem is when you don’t know how to clean it up. I walk you through cleaning up old accounts through merging them.
Another topic I regularly teach is Accountable Reimbursement Plans. I used to think of this as a pretty straight forward topic, but I’m an accountant. I think in accounting rules…debits, credits, etc. The best part of this presentation is that chart for figuring out if mileage is commuting or business. This would also be a good one for church treasurers to review as they also have the same questions.
- Legal/Tax Resources from Dakotas UMC: https://www.dakotasumc.org/finance-and-benefits/finance/legal-resources
I just ran across one of my pet peeves…the duplicate vendor. Whenever I run across one, it makes me feel like I’m being careless and sloppy. How could this happen. Just accept it that duplicate vendors happen and now let’s fix it.
I’m sure other church software systems have their own way of fixing this. Some you are forced to to just inactivate the vendor you don’t want. With QuickBooks, the fix is not at all intuitive…which is kind of ironic. You have to name the duplicates the exact same thing.
Check out the video below:
- Guidance from QuickBooks help: https://quickbooks.intuit.com/learn-support/en-us/chart-of-accounts/how-to-merge-accounts-customers-and-vendors/00/186297
One of the things I take pride in is keeping accurate accounting records and reporting anything that’s out of the ordinary. Something that undermines this is when I accidentally post something to a past period that I’ve already reported on. Unexplained transactions posted in the past makes you look like you’re playing fast and loose with the books.
I don’t know if this is a change in accounting philosophy, but it seems like newer accounting systems assume that closing the books is optional. For QuickBooks Online, you need to dig around in the Account Settings…which I’ll show you in the video. I’ll also show you how to void a check in a closed period…which is needlessly complicated.
Check out the video below:
Finishing up my 30-day free trial of QuickBooks Online. This is the last tip I wanted to throw out. If you’re not using Sub-Accounts in QuickBooks, your reporting is lacking. The only way I know how to get robust reporting for a church is to use Sub-Accounts. Sub-Accounts let you better organize your accounts. They let you show detailed or summarized reports. They let you easily setup custom reports for specific ministries.
Check out the video below:
- Chart of Accounts that can be imported into QuickBooks: https://www.dropbox.com/s/iqx9iiyw6o3r43y/QuickBooks_Online_COA_Sample_File.xls?dl=0
- Detailed Profit & Loss: https://www.dropbox.com/s/f2342ff0ry0lc9p/Detailed%20PnL.xlsx?dl=0
- Summary Profit & Loss: https://www.dropbox.com/s/sdbyhy0qvnigkb7/Summary%20PnL.xlsx?dl=0
- In Between Profit & Loss: https://www.dropbox.com/s/ubak2q9wbatqfwm/StatementofActivity.pdf?dl=0
I am a believer that many churches’ future is determined by their chart of accounts. The chart of accounts shape the church leaderships view of their finances and affect their decisions. A confusing chart of accounts leads to confused decisions. I know there are many exceptions, but the chart of accounts is one of the hidden forces either helping or harming your decision-making ability.
Sheri Meister (Executive Director of the Dakotas United Methodist Foundation) and I identify three steps in this video to cleaning up your chart of accounts. 1)Cleaning up the old stuff by either chucking it or renaming it; 2)Making sure every account has an owner; and 3)Using the roll-up (sub-account) abilities of your accounting system. Do these things, and you will greatly help your leadership in making good decisions.
- Presentation Slides: https://www.dakotasumc.org/media/files/old/00/Conference/Finance/StewResrces/Chart_of_Accounts.pdf
- Chart of Accounts Template for QuickBooks: https://www.dakotasumc.org/media/files/old/00/Conference/Finance/StewResrces/QuickBooks_Online_COA_Sample_File.xls
- Example Balance Sheet (Statement of Financial Position): https://www.dakotasumc.org/media/files/old/00/Conference/Finance/StewResrces/Balance_Sheet.xlsx
- Example Detailed Profit and Loss (Statement of Activities): https://www.dakotasumc.org/media/files/old/00/Conference/Finance/StewResrces/Detailed_PnL.xlsx
- Example Summarized Profit and Loss (Statement of Activities): https://www.dakotasumc.org/media/files/old/00/Conference/Finance/StewResrces/Summary_PnL.xlsx
I’m still working in my 30-day free trial of Non-Profit QuickBooks Online. One of the first challenges I’ve helped churches work through is how you handle all those church funds. I’ve seen two good solutions: 1)Track it all in the Equity section or 2)Track it in Equity AND Other Income. I show you this in the video below.
As an after thought, I wonder if it would work to set them up in the Liability section? Would this be better? It might help the church leaders see the obligation related to holding these funds.
- Sample Chart of Accounts for QuickBooks: https://www.dropbox.com/s/4e9rqb4mmswque1/Chart%20of%20Accounts.xlsx?dl=0