December Budget Bills

Discuss questions around local unit policies for budgeting, reconciling, etc. This forum should not contain specific financial or membership information.
blairjames
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December Budget Bills

Postby blairjames » Wed Aug 19, 2009 10:41 pm

The question that I have is how to pay December budget bills in January and have them reflect in the prior budget year in which they occured.

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Mikerowaved
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Postby Mikerowaved » Wed Aug 19, 2009 11:29 pm

blairjames wrote:The question that I have is how to pay December budget bills in January and have them reflect in the prior budget year in which they occured.

Greetings, and welcome to the forum!

Unfortunately, this is not possible. Under the current system, a check must be written and transmitted to CHQ prior to the cutoff date and time for that year (typically, noon MST, Dec 31, but this can vary) in order to come out of that year's budget. Anything after that will come out of the following year's budget.

May I ask what type of bills you are trying to pay?
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Postby jdlessley » Wed Aug 19, 2009 11:31 pm

What you are suggesting is called the accrual method of accounting. The Church uses the cash-basis of accounting. This means that record entries are made when funds are received for income and when paid for expenses. In accrual accounting income is recorded when earned rather than when recieved. Expenses are handled in the same manner. They are recorded when the expenses are incurred rather than when paid. This is what you are suggesting. Unfortunately the two accounting methods cannot be mixed. And since MLS is programmed to use the cash-basis method, which is the the accounting method the Church uses, you cannot do as you would like to do. Under cash-basis accounting the only way to have a bill in December be recorded in December is to pay it in December. Bills paid in January have to be recorded in January.
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Postby russellhltn » Thu Aug 20, 2009 12:25 am

blairjames wrote:The question that I have is how to pay December budget bills in January and have them reflect in the prior budget year in which they occured.


If these are routine bills, then I think you're just going to have to accept that it's the way it works. If this is something special, you should probably talk to the stake clerk. The stake has some flexibility in how the budget funds carry over. It will still go against the new year's budget, but you might be able to get a increase in your allotment as a type of carry over.
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Postby crislapi » Thu Aug 20, 2009 8:31 am

As was stated, it depends what type of bill. If it is one you have to cut a check for (and it sounds like it is) then see the comments above. If it is an automated debit-type payment, you can use the "not a check" option in "Enter Expenese" and set the date to when the charge was entered.

If this is routine (same activity at the same time each year resulting in similar carry-overs), I would suggest not worrying about it. Sure, some of your expenses from last year carried over to this year, but then some of your expenses this year will carry over to next year. It comes out in the wash.

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blairjames

Postby blairjames » Sat Aug 22, 2009 2:05 pm

Mikerowaved wrote:Greetings, and welcome to the forum!

Unfortunately, this is not possible. Under the current system, a check must be written and transmitted to CHQ prior to the cutoff date and time for that year (typically, noon MST, Dec 31, but this can vary) in order to come out of that year's budget. Anything after that will come out of the following year's budget.

May I ask what type of bills you are trying to pay?


Sure, typical budget items to local vendors for primary, ward, relief society activities, etc. Thanks for responding.
See here is the rub, When I pay Decembers bills in January, then the next years budget is decreased by Decembers bills. OK, I guess that's no big deal if I magically increase the following years budget by the sum of decembers bills.

Not only that, but what if there is a carry over of money from the prior year because an auxillary doesn't spend every penny of prior years budget allowance for them.

So it seems you have to do all this accounting on the side. So In my small non accounting mind, why not have the budget money roll over to next year and let the Bishop decide how to re-allocate. The ward still has the same amount of money either way. Sorry, tried to keep it short.

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Postby lajackson » Sat Aug 22, 2009 2:15 pm

blairjames wrote:Not only that, but what if there is a carry over of money from the prior year because an auxillary doesn't spend every penny of prior years budget allowance for them.


Whatever amount the ward has at the end of December that has not been spent is gone. If there is a need to compensate one way or the other, the ward needs to work with the stake to adjust the following year's budget allocation.

The stake has some flexibility to do this up to a certain point and time.

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Postby crislapi » Sat Aug 22, 2009 3:23 pm

blairjames wrote:So In my small non accounting mind, why not have the budget money roll over to next year and let the Bishop decide how to re-allocate..


It is up to the stake to decide what to do with money leftover at the end of the year.

I think we've all been there. While it is perhaps frustrating, it's the way church finances have been set up and I doubt they are going to change anytime soon. So it's a matter of finding a way to work within the system that you can live with. For me, we push to get receipts turned in quickly, but also knowing we do the same activities every December, resulting in the same expenses rolling over each year anyway. Last year's December activities will be charged against this year's budget, but this year's December activities will get charged against next year's budget. It roughly balances out.

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Postby russellhltn » Sat Aug 22, 2009 3:30 pm

blairjames wrote:See here is the rub, When I pay Decembers bills in January, then the next years budget is decreased by Decembers bills.


I think the important thing here is to communicate with the rest of the ward how the church accounting system works. Talk with your bishop and just tell them that if they don't get the recipts to you by x hour, it's coming out of next year's budget. I think once properly motivated, you'll see very few December bills in January. :)
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Postby aebrown » Sat Aug 22, 2009 4:32 pm

blairjames wrote:So In my small non accounting mind, why not have the budget money roll over to next year and let the Bishop decide how to re-allocate.


I know several people have mentioned that the stake has "some flexibility" in handling this. Actually, the stake has tremendous flexibility. See the Budget allowance wiki article for some options.

In our stake, we have chosen to always have wards carry forward their surplus (up to a fairly generous cap amount). Back when I was a ward financial clerk, we had a default policy of no carryforward, so I dealt with the issues described in this thread. It was a pain to submit special requests, and I don't think the stake liked dealing with it. We also had a some "use it or lose it" spending going on at the end of each year.

Now that our stake allows ward to carry forward their surpluses (and deficits :)), life is so much simpler. Wards don't go on spending sprees at the end of the year, because they know they'll have the money next year. They don't have to agonize over the check they weren't able to write before the December 31 cutoff. They don't have to make special requests for exceptions. If they overspend, they know they'll have that much less to work with next year.

Of course, how each stake chooses to handle surpluses or deficits is up to the stake president. But I think some stakes look at the way MLS starts each year with a 0 budget and somehow assume that that means that there can be no carryforward. That is not true. You may want to consult with your stake clerk and make the suggestion that the stake allow wards to carry forward its budget balance for all the benefits I mentioned above.


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