Overview:  Over the past 2 decades I have seen a number of churches encourage their employees to tithe by taking a payroll deduction from their paychecks.  If you are currently using Shelby v.5 financials and have one or more employees tithing by a paycheck deduction, then you might want to read further.  If you are upgrading to ShelbyNext Financials and want to know how to continue making this deduction, then you should read on.  Or if you are curious and just like to read, then . . . .

While the payroll deduction approach may seem simple for the donor, it makes it a bit awkward when the employee decides to change the gift amount or decides to start giving in a different way.  It seems to me that many, if not most, donors now wants private, flexible control over their giving.  And, this group is fast to adopt online giving.  They like setting up a recurring amount, which they can modify at any time.  Ok, if you are thinking that older people won’t like this new approach, then think again.  Reports coming from churches confirms that senior citizens are the quickest to adopt recurring gifts.  That way they don’t have to worry about forgetting to give.

But, as you transition to ShelbyNext Financials, you might still want to utilize the payroll deduction approach.  If not, you can stop reading here.

Approach: In ShelbyNext Financials setup a liability account to track the deduction, and add a distribution to the Charitable contribution to church deduction type.  Then setup an item in your contributions program to record the donor’s gift.  (NOTE:  The contribution item is called a fund in Arena, a category in ShelbyNext Membership, and purpose code in Shelby v.5.)   Run payroll.  Add the gift to the donor’s record using the special giving item you have established in your contributions application.

Add a Tithing Wash Account in ShelbyNext Financials Chart of Accounts

  1. Open General Ledger
  2. Hover on Modify and choose Chart of Accounts
  3. Select Account Type = Balance Sheet
  4. If you are using Funds in Financials, then select your preferred fund
  5. Click Search
  6. Click Expand All
  7. Select Add Account
  8. Enter an unused liability account number (NOTE:  Usually liability accounts starts with the number 2)
  9. Enter a name for the account (i.e. Contribution Wash Account)
  10. Change the Account Type to Liability using the pull down arrow.
  11. Click OK to save your work

Add a Distribution for the Deduction type in ShelbyNext Financials Payroll

  1. Open Payroll
  2. Hover on Modify and choose Deduction Information
  3. Choose View Ones with Distributions
  4. Click Search
  5. Locate and open “Charitable contribution to church” deduction type
  6. Click Add New Distribution
  7. Fill out the Liability Account section on the popup modal
  8. OK to save distribution
  9. Click Submit to save your work

Add a Donation Type in your Contribution Application

NOTE:  You will need to follow the normal procedures for adding a giving type in your Contribution Application.  General instructions follows:

  1. Add a new giving type (i.e. fund, category, purpose code, etc.)
  2. For the asset or bank account, select the Contribution Wash Account established in first section of above instructions.
  3. For the Income select the normal account for the giving type.

Execute Gift Procedures

  1. Run Payroll, including any donors with a charitable deduction type
  2. In your contribution application create a manual entry of the gifts included in the payroll run
  3. Post all entries from steps 1 and 2 above
  4. Check the balance of the Contribution Wash Account to verify it shows a zero balance.
    1. If account is not zero, then check the amounts entered in contributions and correct mistakes
    2. Post all entries
    3. Return to step 4 above

 

 

 

 

 

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