Making a List and Checking it Twice (Santa Claus's Unsolicited Accounting Advice)

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Though “making a list'“ might sound simplistic, it is important to track a church's fixed assets at some level or another. Whether utilizing software specific for this purpose or general-use software such as Access, FileMaker or Excel, a church should develop a database of some sort to aid in this tracking process. Whatever solution it employs, churches should ensure that the database includes accurate relevant details such as the cost of the item, the date acquired, its service life, and any accumulated depreciation. Many CPA firms have depreciation software that can be utilized as well.

Once you make the determination of how to track this information, it should be input into the fixed asset module or another software program designed for maintaining fixed assets. Tracking property and equipment in a spreadsheet program like Excel can become an administrative burden, but is a viable solution in some instances.

A database should be kept up-to-date for insurance purposes as well as for proper accounting. These objectives might overlap, but each subset may contain different records, as the criteria for tracking are different. The church insures buildings and property in the event that there is a theft, tornado or some other tragic event, so having a detailed inventory of the church’s assets could be critical.  A current inventory listing of property and equipment allows the church to present to the insurance company an accurate record of the assets that were lost. This property and equipment inventory should include the date of acquisition, a description of the asset, quantity, and location.

In addition to a listing, we also suggest that a church make an annual video recording of the church property. Such a video would slowly scan church property, panning each room carefully, and should be done at least once per year. It could even be a fun project for the youth pastor and a couple of students. The inventory listing and/or video should be duplicated and stored off-site for safekeeping.

Finally, churches should prepare a periodic reconciliation of the fixed assets or depreciation schedule to the general ledger. That ensures that the physical listing agrees with the financial statements and records, thereby ensuring the accuracy of both.

A church practicing good stewardship will watch over its assets by maintaining accurate and thorough property records, taking periodic inventories of its holdings, and making security a priority.

What software do you use to track your fixed assets? Is it reconciled routinely? Do you tag your assets? When was the last time you performed a physical inventory?

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