v.5 Prepare Meaningful Financial Reports

Transcription

1 v.5 Prepare Meaningful Financial Reports Presented by: Mark Fisher Shelby Consultant 2013 Shelby Systems, Inc. Other brand and product names are trademarks or registered trademarks of the respective holders.

2 Objective To look at the appropriate financial reports that can be prepared to assist the various individuals or groups within the organization to carry out their responsibilities. What You Will Learn in This Session The need for financial reports Various reports that are available Which reports are appropriate How to create Special Reports

3 Why Provide Financial Information? Required by law in many states Required by denominational offices Required in connection with loans While not required for churches, other non-profit organizations must annually prepare IRS Form 990 Make informed decisions Can be a measure of effectiveness or ministry health Accountability

4 Who is Responsible for the Financial Reports?... the fair presentation of a not-for-profit organization s financial position and activities in its financial statements prepared in accordance with GAAP is the responsibility of the not-for- profit organization s management. (Ruppel) The role of the independent auditor is to issue an opinion as to whether the financial statements prepared by management are presented in accordance with GAAP (Ruppel). In my opinion the accounting department is an integral part in making sure that all financial transactions are properly recorded and accounted for. This includes properly documenting all transactions.

5 What Makes Financial Reports Meaningful? Accurate Understandable Concise Timely Consistent

6 Who Needs Financial Information? o Donors, Members, Vendors, Financial Institutions o Board o Senior Management o Ministry Leaders/Department heads o Any staff member who is responsible for an area of ministry. This can be as small as a single account. o

7 What Reports are Appropriate for Each Group? Donors, Members, Vendors, Financial Institutions Most desirable would be Audited Financial Statements. In the absence of audited statements, a set of reports that would include: o Statement of Financial Position as of stated date (Balance Sheet) o Statement of Activities for the period (Income Statement) o Statement of Cash Flows for the period NOTE: Shelby statements are not fully GAAP compliant. The report names do not conform to GAAP standards and the Statement of Cash Flows can only be generated for a single month at a time. o Accompanying notes Board Over the years, it has been my experience that the board charged with the financial oversight of the organization, i.e. Board of Elders, Board of Deacons, Finance Committee, Trustees, etc., is interested in three items: o Who is over budget? o How much money is in the bank? o How are we doing compared with last year? To answer these three questions, three summary documents were prepared: o Who is over budget? Budgeted Financial Statement summarized at the department level The Treasurer would be provided with the detail Budgeted Financial Statement and each board member knows he/she could request additional detail.

8 o How much money is in the bank? Simply showing how much money is in the bank does not give the entire story. You must take into account restricted and dedicated funds, outstanding liabilities and other deferred revenue. For this I have prepared a special report called a Cash Position Summary. o How are we doing compared with last year? I found this could be clearly presented in a graph from the General Ledger inquiries. Multiple accounts can be included. This was the first item that the non accountant types would look at. Senior Management o This group needs basically the same information as the board, but with more detail, particularly in the area of income and expenses to budget. o The Budgeted Financial Statement provides this information. How much the Senior Management looks at this information varies from organization to organization. o This gets into the area of having faith vs. counting the cost. Department Heads o Need feedback for the areas for which they are responsible o The method I have employed for this is to give the department heads inquiry rights for the General Ledger along with the ability to print a Budgeted Financial Statement and a Detail Ledger. o If you work with designated/restricted accounts then you might want to also give them access to the Designated Fund Report. o I have then used the Account Rights Utility to limit the Departments and accounts they can actually access. 9

9 o This has proven to be a threefold success: They thought I was suddenly being less controlling. They were not constantly coming to the accounting department asking for reports that would then end up sitting on their desks for the next two weeks. They can get up to date information whenever they want; they don t have to wait until the end of the month, assuming information is entered and updated on a timely basis. Individual Staff members o They would need information similar to department heads with the exception that it might be limited to one or more specific accounts. o They need to have access to the financial information relating to their areas of responsibilities.

10 Reporting Tools o Balance Sheet (Statement of Financial Position) o Regular Income Statement (Statement of Activities) o Budgeted Financial Statement o Preliminary Budget Report o Cash Flow/Balance List o Columnar Income and Expense Statement o Designated Funds Report o Special Report Layouts utilizing any of the report formats 11

11 What are Special Reports? Special Reports is a design option that allows you to set up custom layouts to group, rearrange, or summarize accounts. You start by creating a Design formatted the way you want. A Special Report is built and prints by line number. Building a Special Report o Start with a title by clicking on Special Reports Design > New. o Right click below Line # to get started. Enter a Line Number (suggestion build by 10 s, i.e. 10, 20, 30...) Enter a Line Type. These are the same as when you set up your chart of accounts, i.e header, detail, totals, and skip page. 12

12 Enter a description. This can be whatever you want and does not have to be the same as the account number. For detail lines you will enter the desired account number(s). Options include: Single account with fund and department i.e Range of accounts, i.e to An account or range of accounts across all funds and departments. Leave the fund and department fields blank and enter only the account number range, i.e to When entering a single account you only need to enter the account once; you do not need to repeat it in the Account High field. If you desire to build a columnar report, i.e. Balance Sheet by Fund or columnar income statement, you cannot build the report by leaving the fund and/or department fields blank. You must list each one individually. 13

13 Attachments Attachment 1 Columnar Balance Sheet (Monthly Report) Attachment 2 Consolidated Balance Sheet (Special Report) Attachment 3 Available Cash Report (Special Report Balance Sheet) Attachment 4 Designated Fund Report (Special Report) Attachment 5 Budgeted Financial Statement (Monthly Report) Attachment 6 Budgeted Financial Statement (Special Report) Attachment 7 Giving by Month Graph (Inquiry) Attachment 8 Cash Flow/Balance List (Special Report) Attachment 9 Columnar Income Statement (Special Report) Attachment 10 Preliminary Budget Report (Special Report) 14

14 Attachment 1 Columnar Balance Sheet (Page 1) 15

15 Attachment 2 Consolidated Balance Sheet All Funds (Special Report) 16

16 Attachment 3 Balance Sheet Variation to show available cash (Special Report) 17

17 Attachment 4 Designated Fund Report Grouped by Responsible Person (Special Report) 18

18 Attachment 5 Budgeted Financial Statement Detail 19

19 Attachment 6 Budgeted Financial Statement (Summary) (Special Report) 20

20 Attachment 7 Giving Comparison Graph Current vs. Prior Year Produced from the Inquiry screen 21

21 Attachment 8 Cash Flow/Balance List (Special Report) Must be set up as a Special Report You must reverse the sign on all detail lines, but not the total lines 22

22 Attachment 9 Columnar Income Statement (Special Report) Page 1 Only works if you do not have too many departments Time consuming to set up 23

23 Attachment 10 Preliminary Budget Report (Special Report) 24

24 Recommended Resource Materials Accounting and Financial Reporting Guide for Christian Ministries by Evangelical Joint Accounting Committee. $20.00 Not-for-Profit Accounting Made Easy by Warren Ruppel. $22.00 Allocating and Reporting Ministry Expenses by ECFA. $7.00 Donor-Restricted Gifts Simplified by Dan Busby. $15.00 All of these materials, along with additional resources, can be ordered from ECFA at 25

25 Mark Fisher Shelby Consultant Mark Fisher has been a Shelby Independent Trainer since 1998 and currently serves Shelby customers as a Shelby Consultant. He was previously the Business Administrator at Shandon Baptist Church in Columbia, SC where he gained valuable experience with Shelby software programs. Mark s unique blend of skills and experience allows him to bring practical knowledge to the ministry organizations he trains full time