Transitioning record-keeping

by Don Wilson
(Birmingham, AL)

This is such a helpful site. Thank you so much. Exactly what I’ve been looking for.

I’ve just joined the board of my small church (+/- 75 attendees) and found that financial records are in disarray. It is the typical problem of laymen (like me) doing their best to keep the records but having no idea of the concepts of accounting.

My question is this: What problems are involved in transitioning the entirely messed up records to a proper accounting system. I hold a business degree from decades ago that I have never used, so I’ve studied accounting but am far from experienced at using it. I am currently studying hard to understand the proper way to account for our church finances. Planning to download your book in a few minutes. But I’m concerned about the possibility of not transitioning the records properly into a more correct system; that we might run into problems with gov’t entities if we do it wrong. Does your book cover that? Is there any quick guidance you can give me or steer me to?

Again, thanks so much for your site.

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FASB ASC Topic 958
by: Vickey

If you have a small church and not very many assets and liabilities you can probably use paper ledgers or spreadsheets; however, you may want to consider setting up QuickBooks, Aplos, or a similar accounting software from the very beginning.

If I were you I would try to re-create as many years back as you can with the receipts and documents that you may have. If this is not possible, just start keeping accurate records from this point on.

The government does not specify what kind of accounting system you must have, just that you keep accurate records and use fund accounting.

See this page for FASB ASC Topic 958 which describe the way nonprofits should account for contributions, present their financial statements, and account for certain investments: or click on the Fund Accounting button in the left hand column.

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