Too Many Funds
Question regarding fund accounting:
When I first set up the chart of accounts in the software my church uses, Power Church Plus, I created fund numbers for each ministry ie. General Fund 01, Women's Ministry 02, Men's Ministry 03, Youth Ministry 04, Media Ministry 05, Benevolent Fund 06, and Building Fund 07.
The problem is, the only true restricted fund we have right now is the Building Fund/Loan Repayment Campaign. I am thinking as we go into the new year just to create revenue and expense accounts for the various ministries within the General Fund and no longer code any transactions to the fund numbers I set up.
The only two fund numbers I will continue to use are 01 General Fund and 07 Building Fund. Do you foresee any issues with FASB standards with making this accounting change from the fiscal/calendar year of 2009 to 2010? If we ever have a restricted purpose in either of the other funds, then I will use that fund number in my journal entries, contribution entries, and writing of checks.
Thanks for your guidance and input here.
I believe it will be fine to set your fund accounting up as you have proposed.
The rule of thumb to remember in setting up funds is a fund is “an accounting entity that needs to be kept separate, having its own source(s) of income and its own expenses.”
So if those fund accounts you set up in the beginning do not have their own income coming in and expenses going out; then I would make them inactive.
Hope this helps.
Church Accounting Package