Allocating Funds Between GL Line Items

by Amber

Hi! I have purchased your books and spreadsheet.

This is what I have setup and have been using for our small church for the past several months.

My church has not had any type of accounting/bookkeeping processes in place prior to me taking over, only record keeping and simple reconciliation of accounts.

I have used your guide to set up a chart of accounts and have five funds that we operate from. All has been going well, however as we near year end and begin to think about creating a budget for next year I have a few questions.

First, throughout the year our church members vote to budget a specific amount for the purchase of something or a project. For example, we did some remodeling and revamping this year. A budget was voted on for the committee in charge of this.

For my GL I wanted to move the funds from our General Fund to the Building Fund. However, I ran into the issue of which line items do I use to show this?

I simply have General Fund Contributions (where all undesignated funds go), Building Fund Contributions, Youth Fund Contributions, etc. in the Income section of the COA and the usual type of expense accounts much like your example.

How do I show this without messing up the Budgeted to Actual numbers; without making this look like more income received?

Another example, it has been discussed to budget a certain dollar amount or percentage every month to the Benevolence Mission and possibly others. How would I move these funds from the General Fund to the Missions/Outreach Fund without again showing this as a contribution or income received?

I hope that I have sense with my explanation and questions. Thank you for any advice!

Comments for Allocating Funds Between GL Line Items

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Transferring Between Funds
by: Vickey

I would set up an income account titled "Transfer Between Funds" and "track" those "transfers" in it.

For example, say you wanted to move $500 from the General Fund to the Building Fund. Put the $500 in the "Expense" column of the GENERAL FUND column ... in the"Transfer Between Funds" income account row.

Then put $500 in the "Income" column in the BUILDING FUND column in that same "Transfer Between Funds" income account ROW.

You have a positive and negative number in the same income "row" that is essentially "canceling each other out", so it does not affect your budget.

Note that the Budget to Actual report should never show an amount in that income account because you are just "moving" money that has already been reported in the "Fund" you are moving it out of.

BUT the Statement of Activity by Fund will show that amount that you decreased out of one fund and increased in another fund =)

You can do the same with the "percentage" you want to designate to a certain fund each month. You can either use that same "Transfer Between Funds" income account and type in the "description" field what it is...or use another income account (I set up 10 in that 5 fund workbook) and title it something like "Monthly Mission Move" and use it the same same as the "Transfer Between Funds" income account.

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