When it comes to your church finances, transparency and accuracy are paramount. Managing the financial aspects of your ministry requires attention to detail, adherence to accounting standards, and the ability to anticipate expenses. The wait is over if you’ve been seeking or waiting for an accrual accounting solution that simplifies your accounting processes. Realm Accounting now offers accrual-based accounting for your ministry!
With accrual accounting, ministries can now record expenses as they occur, eliminating the need for manual adjustments and ensuring compliance with Financial Accounting Standards Board (FASB) Standards. This means ministries can maintain accurate financial records, giving staff real-time insights into the church’s financial position.
Accrual accounting enables ministries to anticipate and view outstanding bills on the Statement of Activities. It prevents overstatement of net income, ensuring a more accurate view of the current budget variances. This level of transparency empowers ministries to make informed decisions and effectively steward their resources.
Key Benefits of Accrual Accounting
Accrual-based accounting in Realm Accounting extends beyond simplifying your ministry’s financial management. Here are some key benefits of having accrual accounting as an option in Realm Accounting:
- Accurate Financial Statements: With accrual accounting, your ministry can effortlessly generate financial statements in compliance with FASB Standards, eliminating the need for manual entries, which ensures accuracy.
- Real-Time Expense Recording: Your ministry can record expenses as they occur, providing your staff with accurate, real-time information on the church’s financial positioning.
- Streamlined Workflows: Accrual improves your workflows for entering, reviewing, printing, and managing invoices, making financial management less time-consuming and more efficient. Also, an accrual transaction is automatically posted to your general ledger when you post an invoice.
- Enhanced Security: Financial admins can give specific permissions to accounts payable staff for posting and voiding invoices, reducing the risk of unauthorized charges.
- Comprehensive Reporting: Realm Accounting provides comprehensive reporting options for accrual, allowing you to update Aging Journals, 1099s, Vendor Details, and Vendor Totals, reflecting paid invoices and ensuring accurate financial records.
Getting Started with Accrual-Based Accounting for Your Ministry
Now, let’s dive into how you can start accrual accounting today!
If you have accounting administrator permissions, you will need to create a core account with Account Type set to Accounts Payable by following these steps:
In the top-left corner, click your ministry hub, then Accounting → Ledger Setup → Settings → enable accrual as your accounting basis → select the core account you want to post invoices to → click save.
Any unpaid invoices are now displayed in the Open tab if you used cash-based accounting before switching to accrual. Switching between cash and accrual basis accounting will be shown in the Change Log for Realm Accounting.
Post Invoices
Once you’ve set accrual as your accounting basis, you can post invoices to prepare them for payment.
In the top-left corner, click your ministry hub, then Accounting → click Transactions → Invoices → select the invoice(s) you want to post → click Post (you’ll get a pop-up that displays your total selected entries and amount) → confirm they’re correct → click Post.
Manage Invoices
If, for any reason, an invoice was posted incorrectly, you can edit it. Here’s how:
Edit an Open Invoice
In the top-left corner, click your ministry hub, then Accounting → click Transactions → Invoices → click the Open tab → click … beside an open transaction → select Edit → make necessary changes → click Save.
Edit an Unpaid Invoice
In the top-left corner, click your ministry hub, then Accounting → click Transactions → Invoices → click the Unpaid tab → click … beside an open transaction → select Edit → make necessary changes → click Save.
Delete an Open Invoice
In the top-left corner, click your ministry hub, then Accounting → click Transactions → Invoices → click the Open tab → click … beside an open transaction → select Delete → Confirm by clicking Delete again.
Delete Multiple Open Invoices
In the top-left corner, click your ministry hub, then Accounting → click Transactions → Invoices → click the Open tab → Select the invoices you want to delete. → click Select an action → select Delete Invoices → Confirm by clicking Delete again.
Void an Unpaid Invoice
In the top-left corner, click your ministry hub, then Accounting → click Transactions → Invoices → click the Unpaid tab → click … beside an unpaid transaction → select Void → select the date the transaction was voided and the reason → click Void.
Streamline your Financial Management with Accrual-Based Accounting
If you’ve been waiting for accrual in Realm Accounting, the time is now to begin streamlining your accounting workflow! Accrual-based accounting can improve financial transparency, efficiency, and compliance, so we invite you to dive deeper into using accrual in Realm Accounting with a MinistrySmart-led webinar on March 14, 2024, at 2 pm EST. Register Today!
If you don’t have Realm Accounting, check out 4 Reasons You Need Church Management Software with Accounting.
Lily Oliver
Lily joined the ACST team in 2020. She worked six years at a large church in Atlanta, GA, as the Business Systems Analyst. Lily understands the mission and challenges of the church. She spent her time in ministry utilizing Realm to help solve those challenges. She is passionate about helping our Ministry Partners leverage technology to fulfill their mission and grow their ministry impact.
