Procedures

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How to track the monies paid to the pastor and other paid church employees

Use a Vendor Code that is to be used ONLY for checks written as an employee. To keep these codes together on the 1099 report you might want to use a prefix like "EM-". Ensure the vendor code field "Print 1099's?" is checked. If an "employee" is reimbursed for expenses like Sunday School materials use a different Vendor Code for these payments.

When writing the checks for these "employees", ensure the line items that include amounts "paid" to them is marked to be included on a 1099. For things that are NOT included on the W-2 (such as, the housing allowance), the 1099 field should indicate these items aren't to be included.

At the year-end you can then use the Print 1099's report to create the W-2's for employee's.

Tracking the Tithe Account (Tithe Allocation Table from DOS program)

Create a separate expense account for each "type" of tithe paid out. For instance, create one for tithe paid to the pastor, one for tithe paid to headquarters, and one paid for miscellaneous reasons. See Accounting Basics.

Bank Fees/Charges/Credits/Interest

Bank fees are entered using the General Journal Entry program. Following is an example:

Reg	Number	G/L Account	Fund	Description	C/V Code	Amount
1	200002	1000		Checking Account - Fee	USBANK	-5.00
0		7105	100	Bank Fee	USBANK	5.00

Bank interest paid or credits to a bank account are entered as follows:

Reg	Number	G/L Account	Fund	Description	C/V Code	Amount
1	200003	1000		Checking Account - Interest	USBANK	3.24
0		5105		Bank Interest	USBANK	-3.24

Setting up a Mortgage or a Loan

When a mortgage or loan is taken out it is recorded using the general journal to a liability account. For example, a $10,000 loan is recorded as follows. (See General Journal Entry)

Reg	Number	G/L Account	Fund	Description	C/V Code	Amount
1	200001	1000		Checking Account	USBANK	10,000.00
0		2500		Mortgage Payable	USBANK	-10,000.00

If the money for the loan goes directly to a third party, the transaction would be recorded as follows:

Reg	Number	G/L Account	Fund	Description	C/V Code	Amount
0		1700		Building	USBANK	10,000.00
0		2500		Mortgage Payable	USBANK	-10,000.00

Mortgage Payments or Loan Payments

Mortgage payments and loan payments consist of two parts; the principal and the interest. When a payment is made the interest portion of the loan is considered to be an expense and is recorded against an expense account while the principal portion is recorded against the liability account. Often these amounts aren't known so the check is written against the expense account. Then later a general journal entry is made to transfer the principal portion of the payment from the expense account to the liability account. For example if the Payment is $60.00 and the interest portion is $2.00; enter the payment in the expense entry screen as $60.00 to the expense account 7800. Then create the following general journal transaction to remove the principal portion of the payment:

Reg	Number	G/L Account	Fund	Description	C/V Code	Amount
0		7800	800	Building Mortgage Payment	USBANK	-58.00
0		2500		Mortgage Payable	USBANK	58.00