Over the years, CTS has collected and reviewed feedback from Church360° Ledger users on how to better improve financial management and tasks for church offices.
With these suggestions and improvements as well as additional software and security requirements, a new interface has been built and added to the church management aspect of Church360°, Church360° Members.
To better factor in the needs for a streamlined, simplified experience for users without dedicated accounting backgrounds while also offering more control over account behavior and calculations for those with more accounting experience, the new Ledger interface introduces some new concepts that users are free to use as their administration prefers.
In addition to the new user interface, the hope of these deviations primarily revolves around offering additional account and customization options to allow users to continue with their current processes they had in place in the former Church360° Ledger site or branch out into various organizational and reporting improvements.
Restricted Funds and (Equity-backed) Funds
The biggest difference between the two Ledger systems involves how special purpose funds are addressed. When churches receive donations relating to a specific project or purpose, they are required to use those funds appropriately. To track and monitor how funds are dispersed, it's common for non-profit software to create a unique account type for these situations.
In the previous Church360° Ledger system, these funds are set up as Restricted Funds, which act as a piece of the overall "pie" that is an asset account, usually a general checking account. This allows the asset account to report on the current balance of what part is restricted for various purposes and unrestricted for general spending. Users could then write checks, make payments, and transfer funds between the various restricted funds to maintain their balances. However, this required users to manually create income and expense accounts for these funds to track the incoming and outgoing totals throughout the year.
In the new system, these funds act as a part of the equity of a church's finances, with built-in income and expense accounts to track its activity. These groups of accounts are then displayed under their own section called "Funds". This will allow for easier creation, budgeting, management, and reporting for these types of items in the chart of accounts.
This paradigm change isn't mandatory but is recommended. For users migrating from the previous system, restricted funds are imported as sub-accounts under their determined asset account, maintaining their balance and behavior from the previous system. Users can continue to use these sub-accounts in the same way they did previously, with little to no change in their workflow.
If a church office elects to start using Equity-backed Funds instead, users will need to move those funds from the asset side of the accounting equation to the equity side. Please visit our article on that process for more information.
Categories and Parent Accounts
In the previous Church360° Ledger system, users could set up their chart of accounts with various account types and add categories for better organization. These categories could then be used to group and total similar accounts for quick reference on reports.
Importing into the new Ledger module in Church360°, those categories have been imported along with their accounts as parent accounts.
Parent accounts act very similar to categories, in that they do not hold their own balance but simply group and total the accounts listed under it.
The main difference between the two would be in regards to reconciliation. Previously, reconciliation had to be done account-by-account, which could cause some confusion regarding restricted accounts set under an asset account like a checking or savings account.
With categories now acting as parent accounts with sub-accounts, an overarching parent account can be reconciled with all transactions from its sub-accounts appearing in the reconciliation window.
More Visibility on Equity Accounts
To maintain accurate accounting balances, financial software must ensure that totals on both sides of the accounting equation are always equal. Both of the Church360° systems keep this in check by adjusting calculations as different account types increase and decrease, typically by adjusting the equity part of the equation.
In the previous Church360° Ledger site, equity is largely hidden and is calculated automatically as asset, liability, and restricted funds fluctuate. Since most churches do not usually need to account for/report on equity balances, use of this account type can typically be ignored.
However, some accounting personnel or church councils might require more dominion over equity balances and reporting. For this reason, the chart of accounts does offer insight on both a book's overall equity and retained income from the previous fiscal year.
Users can create equity accounts as well as transfer funds to accounts designated for specific purposes (now called Funds).
Use of equity accounts, book equity, or retained income is not required for users; it is only an additional feature that those with more experience in editing equity amounts can take advantage of. Users are encouraged to edit equity balances only with the guidance of an accounting authority at their church.
Integrations
In response to various feedback regarding payroll integrations, the new Ledger module will eventually allow for both Paychex and Paycor integrations.
Report Writer
To offer more transparency and easier auditing processes, the new Ledger module will also come with a brand new report writer to allow users to report on their finances in a more customized manner.
Users can start with a default report or completely from scratch and save and share their dynamic reports with other users.
Please visit our article on the Report Writer for more information.