Donation Clearing Account

There are two Default Posting Accounts in Default Account setup within Code Tables called:

• the Donation Account Donations Normally Post to -and-
• the Donation Bank Clearing Account

This is used to make the transfer of funds from an operating cash account to a restricted account for capital campaigns or any other donation account where the funds will be kept separately from the everyday cash. The process is simple and uses solid accounting principles.

To set this up, you would change the BANK ACCOUNT in the Campaign setup to the restricted GL account you have assigned to the separate bank account.

In this example, let's assume your general CASH GL account is 1000, and the Capital Campaign GL account is 1008.

While the payments for all sales goes into the general operating account at the bank, and the majority of your campaigns are sending those funds directly to the standard 1000 GL account, the Capital Campaign is going into the 1008 account.

 

GL entries for the restricted Donation - no payment yet

The next assumption is that a $50,000 donation is pledged - but not paid - to the capital campaign. This simply increases A/R by $50,000, and increases the Capital Campaign donation GL account (in this example, 4125).

 

GL entries when part or all of the payment is received

When the donation is paid (either in part or in full), Theatre Manager will tell you through the End Of Day reporting to move the funds from where they were originally posted to the separate bank account.

 

What this means to Finance

To understand this report, first remove the simple offsetting transactions for Accounts Receivable. eg:

• The final transaction reduces the A/R - and-
• and the second transaction increases the CASH account by $50,000, which is the amount of the payment.
• These are the same transactions we see for every payment in Theatre Manager. Reduce A/R, increase cash.

That leaves us with the two transfer GL entries.

• The first is the Transfer from (1000).
  • It is a credit for $50,000
  • meaning that you are going to need to manually take the funds OUT of the cash account (main bank account) using your online banking
• The second is the Transfer To:
  • which moves the money IN to the other bank account
  • which is 1008 (because that is where you are keeping the actual money for the capital campaign).

So - as always - if you enter the GL transactions as listed from the End Of Day reports, your financial package will track the funds as they are promised, sit as a receivable, are paid, and moved into the correct bank account. Simply follow what Theatre Manager is telling you to do. Place the payment into the correct bank account.

The Only action you need to do is watch for the transfer out and then do something outside TM to move the funds from your operating account to the restricted asset account for the campaign when the payment is made.