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Parish Accounting Tools and Tips PDF Print E-mail
  1. Administrative Issues
  2. Bank Reconciliation
  3. Budgets
  4. Check Printing: Issues Printing Checks
  5. Endowments: Accounting for Endowments
  6. Events: Setting up Special Events
  7. Reports, End-of-Month Reporting to Pastor and Finance Council
  8. Restricted Accounts
  9. Sales & Use Tax - Remitting to NCDR when vendor does not charge Sales Tax
  10. Schools: ParishSOFT© Special Set-Up Requirement for Parishes that have Schools
  11. Sub-accounts, creating
  12. Viewing Account Detail
  13. Voiding Checks

 

I. Administrative Issues

Do not leave more than three months open at one time. There is a warning set to go off if you enter a transaction with a date that is more than 3 months beyond the earliest accounting month that is still open. The warning is meant to protect you from accidentally entering a transaction in the wrong month or year. You will get this warning as you make entries in the current month if you have not closed the last three months.

Any data that is entered in a drop down field must be cleared (deleted) before you can see all of the options available in that drop down list. When data is in the field, it will be the only choice in the drop down, because it is the only one that matches what was typed.

Anytime you get an error message before you were able to submit the data on your screen (or you accidentally navigate away from the screen before you hit submit), try to click on the Back arrow of your browser (or if you are in a window without a Back arrow, you can hit the Backspace key on your keyboard) and sometimes the data you entered will still be there and then you can hit submit.

Never open a second browser on the same computer to login to the same database in ConnectNow. If data is submitted or changed in one browser and then submitted or changed differently in another browser on the same computer, your data could be corrupted or at least inconsistent. (ParishSOFT is working on a way to prevent this)

 

II. Bank Reconciliation

The date that you choose for the reconciliation will determine which deposits, checks and journal entries are available to be cleared. You should always choose the last day of the month you are reconciling to make sure all entries are included. Once you choose the date and open a reconciliation, you cannot create another reconciliation for that (primary) account until it is fully reconciled and you also cannot go back and create a reconciliation for an earlier date.

By entering Service Charges and Interest Income at the time you create a new reconciliation, the system will automatically create journal entries to record these amounts to the default accounts (as indicated in the set up of the primary/subsidiary accounts, if applicable, or in the account information screen of the cash account you are reconciling). Or you can record these service charges and interest income via journal entry, but don’t book them twice.

Ending Balance: This balance is the Bank statement balance that you enter in the opening screen of the reconciliation creation.

System Balance (also the Balance at the top of the screen): This balance is the Book balance as of the date of the reconciliation.

Reconciled Balance: This balance is calculated based on the amounts of the checks, deposits and journal entries you clear or leave outstanding as part of the reconciliation process.

Submit Button: Unlike other screens in ConnectNow, this ‘submit’ button merely saves anything you have entered or cleared. Once you hit submit, you can leave the screen and come back right where you left off. Save your work by clicking ‘Submit’ frequently! It is only when the Difference reaches zero that the submit button changes to Reconcile. Once you click on reconcile, the process is closed and can no longer be edited.

 

III. Budgets

The Budget section works best when using Mozilla’s Firefox internet browser rather than Internet Explorer. It is a browser that works very similarly to Internet Explorer and can be downloaded for free from http://www.mozilla.org/en-US/firefox/new/

For efficiency, budgets should be entered by going to Process > Current Year Budget, rather than going to each account information screen and entering an account budget one by one.

By default, budgets are divided equally over 12 months, but if you click on the button Edit Months, you can manually enter any amount you want for any month individually.

 

IV. Check Processing

Processing Checks:

Check Date: this is the day that the check is actually printed from the system. The check date cannot be prior to the Invoice date because you would not typically pay for a service before it was performed or goods before they were shipped. It is the date that the bill comes out of A/P (bills to be paid) and hits your Cash account (as a credit).

If you void a check in the current period that was originally written/printed in a closed period, the expense and credit to cash will remain in the closed period while the reversing journal entry (debit to cash and credit to expense) will appear in the current period.

Check Printing:

    • Before printing a large batch, print the first one or two to make sure the checks are loaded properly and that they print in the proper order (actual check numbers match the system).
    • After you hit Create Checks, if you don’t see the Adobe pdf window from which the checks are to be printed, it may have popped up behind the other windows on your desktop. Just minimize any open windows until it appears in the background.
    • After you hit Create Checks, if you see the window open for Adobe pdf, but the window is black/blank, you may have a problem with your installation of Adobe Reader, but first try and hit the F5 key on your keyboard to refresh the screen – if that doesn’t work, you may need to re-install the latest version of Adobe Reader at http://get.adobe.com/reader/
    • If checks print incorrectly, you must void each check and select the option “make a new copy of the original bill for repayment” so that it reappears on the print checks screen.
    • Before closing the window from which you printed your checks, wait a minute and make sure they have all printed correctly. NOTE: If you close this window too quickly after printing, the system may think they were not all printed and some of the checks could appear in your listing of checks to be printed the next time.

Trouble Shooting:

Checks print a little differently than any other report in ConnectNow. They open in a new window and use the Adobe Reader software. So errors could be caused by one of two things: version/settings in Adobe Reader and/or Pop-Up Blocker.

You’ll want to be sure you’ve downloaded and installed the latest and greatest version of Adobe Reader.

Once you have Adobe Reader installed, double click the Adobe Reader icon on your Windows Desktop and click Edit | Preferences. On the left side of the display you’ll see a list of Categories, click the Internet category.

Make sure you have a checkmark in Display PDF in browser Window and remove the checkmark at Display in Read Mode Only. Click OK. You can now close the Adobe Reader.

Now open ConnectNow and try to print your checks. If they’re still not coming up properly:

Look for a little yellow bar that displays in the upper portion of the window letting you know that a pop-up window was blocked.

In Internet Explorer, right-click the yellow bar for more options and choose the “Always Allow Pop-ups from This Site”.

In Firefox, click the Options button on the right and choose “Allow pop-ups for charlotte.connectnowaccounting.com”.

 

V. Endowment Accounting

A. Setting up the Accounts

Upon receipt of donor restricted funds, establish a unique sub-account in the 9800 account series, i.e., account 9800.21, 9800.22, etc. Establish an account name by incorporating the name of the donor and the purpose of the endowment, i.e., Jones/Scholarship fund. Credit this account when depositing the funds into the parish checking account.

When issuing a check to the diocesan Foundation to invest the funds in an endowment, establish a unique sub-account to account 1140, Endowments with the Diocesan Foundation, i.e., account 1140.21, 1140.22, etc., using the same sub-account suffix as used in the 9800 account series. Establish the account name by using the same name as the corresponding subaccount in the 9800 account series. Debit this account when entering the payment in Accounts Payable.

 

B. Recording the initial donation:

There are three ways in which endowments are received at the Foundation of the Roman Catholic Diocese of Charlotte (the Foundation) and the accounting for each is slightly different. The following is a guide to explain these three different scenarios:

Scenario 1:

The Parish writes a check from its own resources to invest in the Foundation –

Dr. 1140.xxP Endowments with the Diocesan Foundation

Cr. 1101.xxP Cash, Checking Account - General

Scenario 2:

The parish receives a gift from a donor restricted to an endowment –

Dr. 1103.xxP Cash, Checking Account - Restricted

Cr. 9800.xxRST Donations, Endowment Gifts

Then, the parish must write a check to the Foundation –

Dr. 1140.xxP Endowments with the Diocesan Foundation

Cr. 1103.xxP Cash, Checking Account - Restricted

Scenario 3:

The Foundation receives a gift from a donor restricted to an endowment for the benefit of the parish. Since the parish did not receive the gift, they will not know about it until they receive their quarterly statement. The quarterly statement shows the gift in the line for “additions” (representing additions to corpus/principal). Total additions, less amounts sent to the Foundation in either scenario 1, or scenario 2 above, equals the amount to be recorded as follows –

Dr. 1140.xxP Endowments with the Diocesan Foundation

Cr. 9800.xxRST Donations, Endowment Gifts

Summary: Every endowment is recorded as an asset in account 1140.xxP Endowments with the Diocesan Foundation (in all three scenarios); only scenarios 2 & 3 are recorded to 9800.xxRST Donations, Endowment Gifts.

 

C. Recording the quarterly net gain or loss on the endowments:

This entry is the same regardless of the scenario above in which the donation was received (the debit and credit would be reversed in the case of a loss):

Dr. 1140.xxP Endowments with the Diocesan Foundation

Cr. 4300.xxEND Gain/Loss on Endowments

 

D. Recording the distribution of endowment funds:

This entry is the same regardless of the scenario above in which the donation was received:

Dr. 110x.xxP Cash (1101.xx if distributed funds are for an unrestricted purpose, 1103.xx if distributed funds are for a restricted purpose*)

Cr. 1140.xxP Endowments with the Diocesan Foundation

*If the distributed funds are restricted in purpose, it is recommended that you create a new sub-account in the 1103’s using a sub-account number in a higher range than you are using for your normal restricted gifts (i.e. 1103.98) to keep it separated from those that have a corresponding 8000 account. When the funds are subsequently expended for the stated restricted purpose (such as a scholarship), instead of debiting an 8000 account, you would debit 5147.xxEND (Program/Event expense in the Endowment cost center) and credit 1103.98.

 

VI. Restricted Accounts

When creating new sub-accounts for restricted gifts (in the 8000’s or 9800’s for endowments), after the sub-account is created, go back to the account information page and in the drop down titled Account Restriction, you must select Temporarily Restricted for 8000 accounts and Permanently Restricted for 9800 accounts – this will not happen automatically (the default is Unrestricted)

For each restricted gift received, it should be coded to an 8000 sub-account and it is recommended that a corresponding restricted cash account should also be debited (with the same sub-account number, e.g. 8000.21RST and 1103.21P)

Account 8100 should only be used if you run out of sub-accounts under the 8000 account. If you already have account 8100 and the description says Restricted Donations Expended, this description is wrong and the account should be deleted. When restricted funds are expended, you merely debit the same 8000 account that holds the restricted funds (a net account).

VII. Special Events

In order to track the revenue and expenses corresponding to special events or activities (fundraisers, parish missions, youth trips, etc), establish “projects” for each such activity. Record revenue and expenses to the appropriate revenue and expense accounts, followed by the applicable “project” code.

ParishSOFT provides for amounts to be entered for total budgeted project revenues and for total budgeted project expenses. In most cases, this is sufficient to monitor project activity.

Alternatively, there is a method to enter a project budget by specific accounts. It requires that sub-accounts be established for each revenue and expense account that will be utilized in recording project activity. Enter budgets for each of the subaccounts as you would for any account. When entering deposits and checks, record activity to the appropriate sub-account, followed by the applicable “project” code.

 

VIII. End-of-Month Memorized Reports

The Diocese Finance Office has created standard parish reports that may be helpful for end of month reporting to the pastor and the finance council. These reports have been memorized and replicated to all parishes and should appear in the reports section of ConnectNow. The following is a brief explanation of each of these reports:

Parish EOM (End of Month) Reports:

1. Income Statement by Category and Cost Center – this report summarizes income statement activity by Category headings and Cost Center sub-headings. This is a high-level report showing the activity of each cost center. The default column headings are:

a) Current Month Actual

b) Year-to-Date Actual (from July of the current fiscal year thru the current accounting month)

c) Annual Budget

d) Annual Budget Balance (variance of the annual budget from the YTD actual. Positive numbers are favorable variances, while numbers in brackets are unfavorable)

e) Year-to-Date as a % of Annual Budget (shown as a number - % sign is missing)

 

2. Income Stmt by Account (all Cost Ctrs Combined) – this report summarizes income statement activity by natural account classification (e.g. all office supplies in one line, regardless of the cost center). Default column headings:

a) Current Month Actual

b) Year-to-Date Actual (from July of the current fiscal year thru the current accounting month)

c) Annual Budget

d) Annual Budget Balance (variance of the annual budget from the YTD actual. Positive numbers are favorable variances, while numbers in brackets are unfavorable)

e) Year-to-Date as a % of Annual Budget (shown as a number - % sign is missing)

 

3. Standard Balance Sheet –This is a simple balance sheet with standard categories. Default column headings:

a) Year-to-Date Balance (this is actually the balance as of the last day of the current accounting month)

b) Year-to-Date Last Year (this is the balance from the previous year, but as of the same month as the current accounting month)

 

4. Restricted/Dedicated Roll-forward – This is a roll-forward of restricted and endowment gifts showing the balances at the beginning of the year, monthly debits and credits, year-to-date debits and credits, and the ending year-to-date balances. Default column headings (these are system defaults and cannot be changed):

a) Beginning Balance (Balance at the beginning of the fiscal year)

b) Month Credits (additions in the current accounting month)

c) Month Debits (reductions in the current accounting month)

d) YTD Credits (additions from beginning of the fiscal year through the current accounting month)

e) YTD Debits (reductions from beginning of the fiscal year through the current accounting month)

f) Ending Balance (balance as of the last day of the current accounting month)

 

Parish Cost Center Income Statements:

1. Cost Center Income Statement – Gen Parish Revenue – this report is one of many cost center reports that can be created depending on which cost centers the parish is using. This report can be copied for each cost center. To copy this report for another cost center:

a. Click on this Gen Parish Revenue report and change the filter for cost center to show the next cost center for which a report will be generated.

b. At the bottom of the screen, change the Report Subtitle to match the cost center selected in the filter above.

c. Click on Memorize Report, name it similar to the other cost center reports, but change to the current cost center (and memorize to the Cost Center Income Statements group)

d. Repeat steps a. through c. to create all of the required cost centers reports.

 

IX. Sales Tax - Remitting to NCDR when vendor does not charge Sales Tax

When a vendor does not charge NC Sales Tax, the parish or school is required to remit Use Tax to the NC department of Revenue. For detailed instructions on how to do so (click here)

 

X. Schools: ParishSOFT Special Set-Up Requirement for Parishes that have Schools

A. When Parish and School have separate TINs:

  1. ParishSOFT administrator/user set-up
  2. The ParishSOFT administrator should establish a separate user ID for themselves with the fund level permission set to “parish”. The ParishSOFT administrator will then use their administrator ID/log-in to set-up users and change user permissions. They will use their “parish” ID/log-in to perform all accounting related to the parish. A separate user ID is to be created for the person responsible for the school accounting. Their fund level permission is set to “school”.
  3. Vendor set-up
  4. In order to maintain separate vendor records for the parish and school, the following is necessary:
    1. Establish two vendor types: Parish Vendors and School Vendors
    2. When setting up school vendors, in the “Vendor Name” field, enter “School” following the name of the vendor. This field does not print on the vendor check or on form 1099. It is used solely by the user.
  5. Printing forms 1099
    1. Prior to printing forms 1099, enter the appropriate entity’s Name, Address and TIN in the “Set up” > “1099 Payer Info” screen. Because this information is only entered once in the system, it is necessary to change the information between parish and school each time forms 1099 are printed.
    2. When printing forms 1099, use the vendor type field to identify “parish” or “school” vendors corresponding to which set of forms 1099 you are printing.

B. When Parish and School have the same TIN:

  1. ParishSOFT administrator/user set-up
    The ParishSOFT administrator should establish separate user IDs for themselves: one with the fund level permission set to “parish” and one with the fund level permission set to “school”. The ParishSOFT administrator will then use their administrator ID/log-in to set-up users and change user permissions. They will use their “parish” ID/log-in to perform all accounting related to the parish, and they will use their “school” ID/log-in to perform all accounting related to the school.
  2. Vendor set-up
    Because the parish and school are one entity for TIN purposes, it is not necessary to maintain separate vendor records for the parish and school. Thus, each vendor will be set up once and payments by both the parish and school will be posted to the same vendor.
  3. Printing forms 1099
    Prior to printing forms 1099, enter the parish Name, Address and TIN in the “Set up” > “1099 Payer Info” screen.

 

XI. Sub-accounts, creating

Please be aware that when you create a sub-account, the ParishSOFT system will assign a default shortcut code of 1 instead of using the format we have established as a Diocese. Each additional sub-account you create will default to the next shortcut code number in order (2, 3, 4, 5, etc…) – These shortcut codes have to be changed manually to our established format at the time you create them -

BALANCE SHEET ACCOUNTS:

XXXX.YYE (where X = Account #, Y = Sub-account #, and E = entity abbreviation, a P or S – for parish or school). If you are creating a sub-account for 1101 - Cash, Checking Account General, it might look like this: 1101.21P

INCOME STATEMENT ACCOUNTS:

XXXX.YYABC (where X = Account #, Y = Sub-account #, and ABC = Alpha-abbreviation for the cost center). If you are creating a sub-account for 4101 - Offertory, it might look like this: 4101.21REV

If you have already created sub-accounts and forgot to change these shortcut codes, you will have to delete those sub-accounts and re-create them using the format described above.

 

XII. Viewing Account Detail:

1. Use the Quick Find to select the account to be reviewed. When the account comes up, the basics are displayed on the screen. There are four tabs on the screen. The History tab shows the monthly balance and the monthly budget. As history of transactions is built up in ParishSOFT, it will show the prior years’ balances by month also. This will be a useful tool for comparisons. The Quick Find box remains on the right side of the screen so it is easy to quickly navigate to other accounts.

2. On most reports, it is possible to drill down on any account with one click and see the detail of that account. Simply hold the mouse pointer over the account balance until a finger appears, double click, and the detail of the account will be displayed. Hit the back arrow, and you are back on the report ready to drill again.

3. The account balance report displays the account detail in report form. Go to Reports/ Accounts/ Account Balance. This report could be used as supporting documentation. It could be used, for example, if the pastor or finance council wanted to see detail.

 

XIII. Voiding Checks:

 


If a check cleared the bank, it cannot be voided. If the check is outstanding and has not been marked as cleared on the bank reconciliation, it can be voided (it doesn’t matter if the period is open or not). To void a check, do a "Find Check", locate the check and pull it up. If the check has not been cleared, two buttons will be displayed: "Cancel" or "Void". If the check has cleared the bank, the "Void" button disappears. On the check register report, the voided check is listed, but it is marked VOID (Please note that the original bill will still be associated with that voided check and if a new check needs to be re-issued, you will need to check the box for Create a Copy of the Original Bill for Repayment at the time the check is voided).

 
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