ChurchTrac Logo
 Help Topics / Accounting & Budgets / Basic Terminology and Examples

Basic Terminology and Examples


Accounting applications often use different terms to refer to the same items, which can lead to confusion. Here's an overview of some of the terms used in ChurchTrac Accounting.

  • The Basic Terms
  • Examples
  • Pro Tips

The Basic Terms

You should be familiar with three fundamental terms: Accounts, Funds, and Categories.

Accounts

Accounts are bank accounts--like a checking account or savings account, or it may be a credit card, mortgage, or other loan account. Typically an account is held at a financial institution, like a bank, and you'll receive a monthly statement for an account. Learn more ›

Funds

A Fund allows you to track a special or designated balance of money. For example, your church may have a Youth Fund or a Building Fund. The money in a fund is typically designated for a specific purpose. General Deposits and Expenses that are not designated for a specific purpose are said to be in the "General Fund." Money in a fund may even be spread between multiple bank accounts. For example, a portion of your Youth Fund resources may be deposited in your checking account, and some may be in a Savings account. Every transaction that you enter will be assigned to one or more Funds. (We'll cover transaction entry in more detail below). When used correctly, you'll be able to see at any given moment how much is available in each fund that you have set up. Learn more ›

Categories

A Category allows you to track where money is spent or received for reporting purposes. A transaction's amount is assigned to one or more categories, which allows you to see how much you have spent or received in a particular category over a time period, or to see how your spending compares to your budget. Learn more ›

Examples

To help clarify, let's see how Accounts, Categories, and Funds work together, and how they are different.

Let's take the example of the Youth Fund, and suppose that the cost of youth camp is $3000. To begin, let's suppose there is no money ($0) in the Youth Fund.

As the kids begin making payments for youth camp, this money is deposited into your Checking Account. These camp payments are entered as a Deposit in your Checking Account register and assigned to the Category of "Camp Payments," as well as assigned to the fund named "Youth Fund."

Tracking youth camp payments with ChurchTrac's bookkeeping software for churches

Let's imagine that we received $2500 in youth camp payments. If we ran a report, we would see that we received $2500 in the "Camp Payments" Category. We also see that our Youth Fund has a balance of $2500.

Next, we have to spend some money to cover the cost of transportation to and from camp. So we write a check from our Checking Account and spend $750 for transportation. This transaction is assigned to a category called "Youth Transportation," and like before, it is also assigned to the Youth Fund.

Youth Camp Transportation Expense in ChurchTrac's church accounting software

Since this is a debit transaction (money is going out), our report now shows that we received $2500 for "Camp Payments" and spent $750 in the "Camp Transportation" categories. Our reports also show us that we have $1,750 left in our Youth Fund (the balance after spending $750 for transportation).

We are able to assign various categories to transactions to help classify them for reporting or budgeting purposes. We can also place transactions into Funds so we can see how much is available for a particular purpose.

Pro Tips

Funds & Categories are not Account-specific

Money can be spread out between a checking and savings account. See the Accounting Chart for an illustration.

Use as few Funds as possible

Some churches have a fund for everything ("New Lightbulb Fund"). While you can set up and use as many funds as you wish, doing so will add to the overall complexity of entering and maintaining your data. Any general or budgeted deposits and expenses will likely work best being assigned to the "General Fund," which is the catch-all fund. Any unallocated receipts or expenses should be placed into the General Fund.

ChurchTrac Logo

Your All-In-One Church Software.

Facebook Twitter Pinterest Youtube Vimeo
Home | Our Story | Support | Privacy

Top Features

People
Website/App
Giving
Check-In
Worship
Accounting
Events
Automations
ChurchTrac en Español

Quick Links

Home
Our Story
Pricing
How We Compare
Sign Up
Support
Blog
Contact Us