ECCU Blog

by Mark Jones

During a recent ECCU budgeting webinar for ministries with up to $2 million in revenues, we asked attendees which accounting package they used. Two thirds said QuickBooks.                                                                                            

It has been my experience that many QuickBooks users don’t fully utilize its functionality. If this is true of you, here are several tips that may prove helpful as you go through the budgeting process.

First, make sure you have a good chart of accounts. Keep it simple and relevant. Use categories that can be applied across ministry and operational areas. Also, create a structure that allows you to condense various line items into a summary category when reporting to your leadership or board. An example of this would be the summary category called “program expense,” which would contain a number of lower-level line items, as shown in the lower left of this screen shot.

Next, identify the distinct ministry and operational areas that will constitute your classes. You will use these classes to structure your budget and prepare budget-to-actual reports each month. Don’t go overboard here, but create enough classes so you can produce meaningful reports for each area, like this:

Finally, create your budget using the set up budgets feature. Now you can begin using your chart of accounts and class structure to document the budget. After you’ve completed all the ministry areas, you can run an organizational report that presents the budget based on your chart of accounts and areas (classes) with totals for the entire ministry. You can also run budget-to-actual reports for specific ministries.

If you’d like more budgeting guidance, check out our Budgeting 101  webinar recording and additional resources, including additional tips for QuickBooks users.

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5 comments

  1. Thank you for bringing up the QuickBooks (QBs) resource and this related topic
    I am further impressed with the QBs means of managing what I call “Special Purpose Funds” as a Ministry does its “Fund Accounting”.

  2. Mark Jones @ 2012-10-04 13:12

    Jim, you right that QuickBooks does allow for handing various types of special funds using the class functionality. At my church, we use it to tract the various donor restricted funds so we can account for them accurately and separately from unrestricted donations. In the second screen shot (Class List), you can see some restricted funds set up.

  3. Mark: Again thank you for your QuickBooks (QBs) focus via this BLOG…..One of the QBs Fund Accounting” options is the recommended use of “QB Equity” accounts (as opposed to the “QB Class” system) since the “Balance Sheet” report immediately shows the “Restricted Fund” balances that belong to the “Bank Balance Pool.”
    You then use the “QB Class” process to capture/report why each (or all) of these “Restricted Funds” changed since the beginning of the fiscal year.
    Let me know at “Jim@bcidot.org” if anyone wants to view “Balance Sheet” report samples via this preferred “QB Equity” process and applicable “Bank Balance Pool” Info.

  4. Mark Jones @ 2012-10-10 15:27

    Jim, it sounds like we use a slightly different process and approach. The approach I’m suggesting is to first post all transactions to the appropriate income or expense account and labeling the transaction with the associated “class”. I believe it is most important to recognize the revenue and expenses associated with any “restirctred funds” first. It has been my experience with ministries posting transactions to equity accounts, the income statement is never updated resulting in underreporting of income and expenses. In the approach I use with QuickBooks, whenever you present your official balance sheet (for us at the end of the year), you will allocate the current balance of the fund to the equity account so you show the “funds” balance on the balance sheet.

    I’d suggest any QuickBooks user to contact their CPA to determine the best method and approach for their ministry or any of our Ministry Development Officers can assist in doing this as well.

  5. Good post, useful tips.
    Thanks for sharing it.

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