Is your ministry prepared for the new GAAP reporting changes that take affect for this filing season? If your church files reports according to these GAAP standards and you haven’t made the necessary changes in your accounting practices, you could be looking at a larger bill from your auditors and a scramble at the end of the year. Join the team from FellowshipOne along with our partners at Arlington, Texas accounting firm PSK CPA as we discuss these changes and talk about ways you can be sure you are in compliance.
BONUS: Get a preview of the new tool coming to ShelbyFinancials that will help make pulling together records for GAAP a breeze.
To register, click here.
Our blog today is from Alfred Johnson, the product owner for Shelby Financials, who has been working with churches implementing Shelby for the past 22 years. Alfred has also served as a pastor for 32 years, served on the board of directors for a Bible training institute, and taught business and computer classes at a junior college among many other accomplishments. You can find more thoughts from Alfred on his blog at alfredjohnson.net.
A number of years ago I was contacted by a pastor wanting to know how he could log in to their accounting application. I told him that his church accountant could give him access. His answer? “She will not let me look at the books.” On another occasion, I was assigned to assist a church with their accounting approach. I contacted their accountant about one week before scheduled to arrive. She asked how much I knew about accounting. When I told her, she canceled the training.
From what I have observed and read, churches that have a long time highly trusted employee or volunteer with access to church funds are guilty of either tempting an employee to steal from the church or allowing the possibility of undetected theft.
It does not matter how small or large your church is. You need to create and enforce a separation of duties protocol if for no other reason than protecting the integrity of your employees. Using the tools in Shelby Financials along with common sense will help you structure tasks so that there is less chance of becoming a victim of an internal theft or someone questioning staff integrity.
Accounts Payable: Let’s start here.
- Do you allow staff or volunteers to take a blank check on a shopping trip? That check can be made payable to anyone. Oh, I know you always get a receipt to enter into AP. Well anyone can alter or simply create a receipt that looks legit. Just do not allow this practice.
- Does the same person who enters an invoice into AP, also print, sign, and post the entries to GL? It would be better to have someone not associated with the purchase or entry of the invoice be the one to sign the check. If you use electronic signatures when printing checks, then there needs to be some multiple person control with this process.
- Do you allow credit card holders to purchase anything they want? It would be better to have a purchase approval process prior to making a purchase and a routine to validate charge was actually for church use. Using a credit card can be similar to giving someone a blank check.
Bank Account Management: This one is simple.
- Balance the bank statement into the accounting system and do it each month. Don’t let statements stack up. Just do it.
- The person assigned to reconcile the bank statement should not be associated with any of the payments or receipts posted to the bank account. And, it has been suggested by some auditors that every so often an additional person should examine a copy of the bank statement.
General Ledger: Watch for the following.
- If you have the staff, then have your accounting manager or business manager finalize all postings into the ledger.
- Be alert for an unusual number of correcting entries. If you see this with some frequency, then start asking questions. If it continues, ask more questions.
- Be alert for a large number of manual journals. If your chart of accounts is set up correctly, and the applications used correctly, then there should not be an unusual number of this type of activity. However, with outsourced payroll and other third-party providers, you might see more manual entries than usual. Just remember that it is easy to change journals from outside applications/services.
Accounts Receivable: This can be tricky.
- Accounts Receivable is most often used by churches that support a daycare or have a school. By the very nature of the required structure, the daycare/school operation becomes separated from the church’s general operation. This separation can result in a lack of proper accounting oversight.
- Create an internal audit committee to periodically check on the following:
- Review amounts being charged to each student to verify compliance with established fees.
- Check accounts receivable overdue accounts to be sure that customers are staying current with billings.
- Assign the church business manager the task of finalizing all accounts receivable general ledger postings.
- Church business manager should verify that accounts receivable balances with the general ledger at least once a quarter.
- Checks and cash received should be secured and daily transferred to the church business office.
Payroll: Paychecks are important.
- Access to the Payroll application should be closely controlled. That said, more than one person should be able to run scheduled payments.
- The employees that can process a payroll should not have access to change compensation or deduction.
- Any changes to employee records affecting pay should be reviewed in the application by management.
Join us for a FREE Overview of FellowshipOne + Shelby Financials as we give an overview of the Shelby Financials suite including: General Ledger, Accounts Payable, Bank Account Management, Accounts Receivable, Asset Management, and Payroll.
We will be joined by Alfred Johnson, the product owner for Shelby Financials, who has been working with churches implementing Shelby for the past 22 years. Alfred has also served as a pastor for 32 years, served on the board of directors for a Bible training institute, and taught business and computer classes at a junior college among many other accomplishments. He will give us a unique insight into how FellowshipOne and Shelby Financials can work together to benefit your ministry.
Join us next Thursday, July 12, at 1:30 p.m. CST. To register, click here.
FellowshipOne is proud to partner with PSK CPAs to bring you a FREE webinar titled Navigating Uncertainty: Three Key Changes in the Financial and Tax Regulations for 2018 at 1 p.m. CST tomorrow (June 28). To help you prepare for these new changes, we will also be discussing the integration between FellowshipOne’s church management software and ShelbyFinancials, the leader in church accounting software. Don’t miss this opportunity!
To register for this upcoming webinar, click here.
We are excited to announce our Shelby Financials Integration! With this new integration, your church can be equipped with the most comprehensive People Management software on the market along with an unparalleled name in church accounting software.
FellowshipOne is about helping your ministry care for people. Shelby Financials is dedicated to the stewardship of your ministry’s resources. With this integration, your church can be excellent stewards of your two most valuable resources: People and Finances.
With FellowshipOne + Shelby Financials, your church can:
- Enjoy seamless reconciliation by keeping contributions and receipts perfectly in sync with bank accounts.
- Maintain a high degree of data integrity by reducing the degree of errors caused by manual data input.
- Eliminate time wasted on manual data entry with a new intuitive workflow, saving the church on labor costs.
- Easily find and sync specific subsets of transactions based on the date range and contribution type or batch.
- Create separate journal entries for each unique Company, Year and Period all in the same export.
- Maintain separate journal entries for receipts and contributions, even when attributed to the same fund and accounts.
- Keep contribution data private and financial data secure.
Click here to visit our website and learn more about FellowshipOne + Shelby Financials. Join FellowshipOne and our partners at PSK CPA for a FREE webinar covering financials on June 28. You can register here.
Our series on our employee Visualizer Dashboard contest culminates today with our winner. We hope this contest and blog series has given you some great ideas on how you can implement Insights Visualizer. As you develop dashboards that you think would be particularly useful to other churches, we would love to hear from you and see your dashboards!
The winner of the contest is Ernesto Marquez, a Customer Success Manager for Southeast US and International, who has been with F1 since 2013. His dashboard shows a quick view on important metrics for an Executive Pastor or Senior Pastor, allowing them to either track progress or know if they need to pay attention to a challenge. We asked Ernesto a few questions about his process in developing this dashboard.
How did you come up with the idea?
EM: I tried to put myself in the shoes of a pastor on a church leadership team and think about what they would want to see every Tuesday morning.
How easy it was to develop?
EM: It was somewhat challenging to be honest, I built this idea from some templates from Bayside Church.
Did you hit any snags along the way?
EM: Training is recommended for this level of Insights and I wish I had a bit more experience before diving in. But other than that, the actual interface is simple to operate.
Who do you think would most benefit from using this kind of dashboard?
EM: With custom-made dashboards you can create something valuable for everyone from executive level pastors and directors to volunteer leaders.
Learn more about FellowshipOne Insights and Visualizer here.