The income for contributions, deposits, internal accounts, annual report and/or allocation report doesn't match. Where is the problem?

The reasons why these numbers may not match is varied. This will provide examples of the most common reasons why the numbers don't match.

Some people mistaken think that deposits equal income. This can be true but only in very limited cases. For example, if money is transferred between bank accounts. The money is withdrawn from one account and deposited in another account. This is obviously not new income but it is deposited into an account. This deposit is not income. In this case, your true income would be less than your deposits. Interest bearing accounts will have interest added to the account. Interest is separate from deposits. In this case, your income would be more than your deposits. In both of these cases, income on internal accounts would be different from your deposited amount.

Any deposits where Expense Credit (EC) is used also affects income. Money deposited as expense credit, will not appear as income on internal accounts. Using the expense credit is designed so that the money does NOT appear as income on the internal accounts. This is mostly used for in/out transactions and refund checks. Once again, deposits will not be the same as the internal account income.

What happens in the case where a contributor's check is returned for insufficient funds? The money is initially deposited into the bank. The bank gives you a notice that the check was returned. Typically, an income adjustment would be entered to show a reduction of income. The money is deposited and then removed. The original deposit doesn't change. However, the internal accounts will not show this income because of the income adjustment. This is one example of an income adjustment. Any income adjustment will affect internal account income and cause internal account income to be different from deposits.

Now, let's look at contribution income. First, you have to ask the question: Is every dollar the church receives put into contributions? In many cases, the answer is no. If the answer is no, then deposits and internal account income will not match contribution income. Interest income is income but is rarely put into contributions. Some churches will put refund checks in contributions but others will not. Rental income is sometimes put into contributions but other times it isn't. In/out money can be posted to contributions but it isn't required. Any of these examples (and there are numerous others) will cause Contributions to differ from deposits and internal account income.

The Annual Report and the Allocation report should show the same income. A difference in these numbers indicates a problem with the setup on the Annual Report. Contact NTS if you need help fixing this problem.

Income on the Annual and Allocation reports will generally not match contributions, deposits or internal account income. Why? The General Church has a very specific definition of what it wants churches to report as income. These reports only include the income the General Church has requested. The basic definition of income that the General Church wants is: Any tax deductible contribution to the church is considered income. Non-tax deductible funds are not income and should not be included in the total income. Here are a few examples: rental income, money paid in exchange for a book or other materials, interest income, love offerings to a specific individual or family and some in/out money. There are many other examples that might apply to your church.

So, the final question is: What is the church's income? The answer depends on who is asking. If you are needing to know what to report to the general church, look at the Annual or Allocation reports. These reports should have the correct amount to report to the General Church. The church board, treasurer or pastor would typically want to look at internal accounts or Contributions to see total income. As mentioned above, these two numbers can be different. You might need to look at both numbers. Knowing what you are bringing in for contributions is important. A church with significant rental income (that is not posted in contributions) will want to look at internal account income. Contribution income and internal account income can be the same amount or very close to the same amount depending on what money is posted in contributions. It depends on how money is posted into NTS and what the decision makers need to know to make financial decisions.

Please contact us with further questions. We can help you sort out your income and make sure you are getting the numbers you need.

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