Financial Summary 101

NOTE: To comply with denomination policies, state and IRS laws and to prevent fraud, our church treasurers keep detailed records of all financial transactions, both incoming and outgoing. Jewel preserves these records and creates various reports so that the board can monitor the church’s financial health and make good financial decisions.

Three Sections

Each Jewel “Financial Summary” consists of three sections. Your church’s Financial Summary, no matter how long and complex or how short and simple, has these same three sections.

The Bank Accounts section in Jewel gives you an overview of how much money your church has and where it is being kept. Bank accounts have real money in them where you can deposit offerings, pay bills, and make purchases based on your church’s balances. If you have more than one bank account, Jewel keeps track of each bank account separately and gives you a total balance as well.

The Local Funds are designed to duplicate and itemize, on paper, the real money that is in your bank accounts. There are very specific rules about how donated money - Trust Funds - can be used, and since local funds document where the money came from and where the donor requested it to go, the local funds help us follow those rules.

Local Funds are not actual physical accounts with actual money in them. They are a second set of records - numbers on paper - keeping track of the very same money that is in the bank accounts, but in a more comprehensive and detailed way. And, if set up and used properly, they can also be used to track expenses in order to facilitate budgeting and long- range planning.

The Conference Funds section keeps a record of tithes and other donations that are to be passed on to the Conference in the monthly remittance. Note that after the remittance check has been written at the end of each month, the Conference Funds section will have a zero balance until another offering is entered that includes tithes or other conference offerings.

Each Dollar - Two Ways

The Financial Summary keeps track of your church’s money in two different ways. Every real dollar in each bank account is duplicated and documented, in detail, in either a local fund or a conference fund.

Keeping track of the same money two ways can be confusing if you don’t understand how it works. Sometimes board members think that they have the funds from the bank accounts PLUS the money in the local funds, but it doesn’t work that way. You only have the real money that is in your church’s bank accounts.

And since every penny in the bank account(s) has been assigned a purpose and we must document that purpose, we track and secure that purpose in the Local Funds section.

To illustrate this keeping track of the same money two ways, the following Financial Summary shows that:

Every dollar that is itemized in the Local Funds and the Conference Funds represents a real dollar that is currently in one of the church’s Bank Accounts.

These three sections serve separate and distinct purposes, yet are connected and work together to help you keep track of how much your church has, where the money came from and where it is going.

Look at your church’s Financial Summary through the next few weeks. Identify the three sections. Watch how the numbers in the Ending Balances column change as you enter offerings and make payments. But note that, as money is spent and offerings are deposited, the “Total Bank Accounts Ending Balance” is always the same as the “Total Local Funds” plus the “Total Conference Funds.”

Three sections, working together to give your board the information it needs to do its job.