Should You Move Money Between Categories?
Short answer: No, money should not be moved between Categories. You only move money between Funds, because Funds are where money actually lives. Categories should never be treated as buckets that “hold” money, but as labels for identification.
Why You Shouldn’t Move Money Between Categories
1. Categories Don’t Store Money
Categories simply describe what happened, such as income received or an expense paid. They are labels for reporting, not containers for balances.
All actual money lives in Funds, because Funds are what your bank balances represent.
2. Changing Categories Rewrites History
When users attempt to “move money” between categories, what they’re really doing is re-categorizing past income or expenses.
This implies something happened differently than it actually did:
- Income was recorded for a different purpose than originally recorded
- An expense belonged to a different ministry or budget area
This is not true economically, and it distorts the historical record. Good accounting should never rewrite what actually happened.
3. Categories Are for Budgets, Not Balances
Budgets compare: Actual Income/Expenses vs. Budgeted Income/Expenses
Categories track activity, not available money. If you start reassigning past income or expenses between Categories, you:
- Corrupt your budget comparisons
- Make reports inaccurate
- Break year-to-year trends
In other words, “moving money” between categories destroys the whole point of budgeting.
4. Fund-to-Fund Transfers Are the Correct Tool
When the church leadership decides to repurpose money, for example, move excess General Fund money into the Building Fund, you use a Fund Transfer, not a category change.
Funds represent:
- Where money is held
- What it can be used for
- How much is available
The original category remains tied to the original transaction, preserving your reporting accuracy.
5. Moving Money Between Categories Breaks Things
Allowing category “moves” would:
- Make reports confusing
- Break the meaning and purpose of categories
- Increase accounting mistakes
- Require complex "double-entry" work that most churches do not want or need
By keeping Categories and Funds separate, ChurchTrac maintains a simple system that still follows solid accounting principles.
In Conclusion
Categories reflect how money came in or went out. Funds reflect where money is held and how it can be used.
You never move money between Categories. You only move money between Funds and bank accounts.
This keeps your budget, reports, and accounting records accurate and meaningful!