Category Archives: Xero

Posts, Comments and help for Methodist Church, Xero users.

Church & Not-for-Profit Forum-9 May 2017-Lower Hutt Assembly of God

People in the Lower North Island may be interested in this Workshop.  Topics include:include:

  • Charities Commission
  • Responsibilties of Volunteers
  • Health & Safety in Employment Act
  • Protecting Church Buildings and Assets
  • Mission Travel Insurance
  • Clergy Allowance and Tax
  • Key Staff and Succession Planning
  • Armourbearer Insurance
  • XRB Accounting Standards
  • Christian Savings
  • Panel Discussion

Peter van Hout will be a speaker (XRB Accounting Standards).  He will remain in Wellington on the Tuesday evening and if there is enough interest he will be happy to arrange an evening meeting with Treasurers to discuss Xero and other financial reporting concerns.

The link to the above named Workshop is:  CLICK ME 

If you would like Peter to run a two or three hour workshop on Xero and Financial Reporting then e-mail him directly (peterv@methodist.org.nz) by the end of March please.

Methodist Church Templates for Tier 3 and 4 Reporting Entities – 30 June 2016

The Annual Financial Accounts for 30 June 2016 are required to be completed and delivered to the Connexional office by the 14th October 2016.  This is much later than previous years due to two main reasons, one being that this year is the first year that all registered charities are required by law to have their financial accounts meet the requirements of the Charities Act and secondly, Conference is much earlier.  On balance it was felt that we should provide all Methodist entities time to produce their annual accounts as required by the Charities Act.

Annual Financial Account templates have been modified by the Connexional Office to suit the general needs and requirements of Methodist parishes and are available in three different formats for Tier 3 and Tier 4:

  • Excel spreadsheet,
  • Word document or,
  • Xero template (only applies if Xero is used for the parish’s accounting).

The Excel and Word templates can be found on the accounting blog site (accounting.methodist.org.nz) under Resources.  There are also the latest XRB guides (as at 24 June 2016) relating to the applicable tier being completed.  Also on the same Resources page (http://accounting.methodist.org.nz/?page_id=628) are the instructions on how to complete the new Xero Annual Report template.

  • Xero Templates

If you’re using Xero as your accounting software you can use this template to complete the annual financial accounts.  In the long term this will be a quick way to complete the financial statements as the balances are drawn directly from the general ledgers in Xero.  Therefore there is no need to manually add up each revenue, expense code, etc. However, there is still the need to ensure that the financial statements and the wording within the financial statements relate to your parish.

To use these templates in Xero please email Christinec@methodist.org.nz and she will set you up in Xero and make sure that templates are ready to be used by you.  Christine will NOT complete the annual financial statements for you unless you ask her to do so.  More on this later.

As stated above these are new templates and although they’ve been tested by the Connexional Office, as with any new system, there will be a few teething issues to be dealt with.  As these issues are found we’re feeding them back to Xero support so they can fix them or we may update the standard template to make them work better.

As a result we would suggest that if you’re in the following situations you should be cautious about using the Xero templates:

  • Fixed Asset Disposal – If your parish has disposed of fixed assets in Xero’s fixed asset register during the current or previous financial year, the Xero generated journals do not feed into the Statement of Cash Flows
  •  Those Parishes who were added to Xero in the 2015 Financial Year – When a parish is added into Xero the conversion balance doesn’t feed through properly into the Statement of Cash Flows for the 2015 financial year.
  •  Comparative Difference if you’re a parish which is reviewed or audited – balances for the 2015 financial year might be different to those produced in the Xero report because the template has been set up for Methodist Parishes as a whole and doesn’t take into account individual differences. This will not be an issue for those parishes who are not reviewed or audited but for those that are, the presentation can be adjusted to suit your parish.  This is covered in the Xero guide.

 Please email Christinec@methodist.org.nz if you are in any of the above situations and still wish to use the Xero templates.

Excel and Word Templates Tier 3 & 4

The layout is very similar to that used last year but there are some additions/changes to the templates:

  • Word Document – This has been created for those who prefer to use Word instead of Excel. In this document, balances and information need to be entered manually into each sheet.

 There’s also a Tier 3 Cash Flow Worksheet which accompanies the Tier 3 Word document to help you calculate the cash movements for the Statement of Cash Flows.  Once completed the balances need to be manually copied into the Statement of Cash Flows in the word template.

If you prefer to write in the numbers rather than typing them in then you can do that but you still need to make sure all the numbers add and cross add and reconcile correctly.

  • Approval of Financial Statements – An approval sheet has been added to the templates to ensure the Parish Steward and the Parish Treasurer are happy with the completed balances in the financial statements. Once this form has been authorised there should be no further amendments to the financial statements.
  • “CF Workings” Spreadsheet in the Excel Template– This tab has moved to sit at the end of the sheets that need to be printed off, i.e. beside “Note8-14”. Once the cash flow movements have been entered into this sheet, the balances will still flow through to the Statement of Cash Flows. Please to do not print this sheet and include it with the annual return.  It is a workings sheet only and is used only to make the Statement of Cash Flows calculate correctly.
  • Alternative Notes – Included this year are alternative notes in the Notes to the Performance Report. Please read these carefully and make sure you understand the requirements.  After deciding which note is the most appropriate, delete in Word, (or hide in Excel), the note that does not apply to the parish.
  • Content – Again these templates have been created to cover most situations for a high proportion of the parishes. They aren’t specific enough to include every situation for every parish.  Please adjust the content to suit your own parish’s needs.
  •  Presentation – The annual report should be presented as neat and tidy as possible. Once the information in the templates has been finalised, please delete or hide any rows that are empty.  Please check the page layout of each sheet so when they’re printed off they will continue to look tidy.

An example of a complete set of an annual financial statements will be posted on the Resources Page of the accounting blog site next week (week beginning 28 June)  to help show you what a finished set should look like.

  • Help to Complete the Annual Reports

Once again this year we’re offering the services of a contract accountant to assist you in preparing the annual reports.  The cost is $500.  Please email Christinec@methodist.org.nz if you are interested in this service.

Please remember this is not an audit or review of the accounts it is simply a service to help you compile your annual financial statements.

AUDIT AND REVIEW

Just a reminder that if your operating expenditure as shown on the Statement of Financial performance is over $500,000 but less than $1,000,000 then you will need a review undertaken or you can elect to have an audit.

If the operating expenditure shown in the Statement of Financial performance is over $1,000,000 then you will need an audit.

Both the review and audit will need to be conducted by a qualified person.

The Connexional Office will be checking to make sure that the person signing the review or audit is a qualified person.  The people qualified to undertake an audit or review can be found at http://charteredaccountantsanz.com/en/Site-Content/find%20an%20accountant.

Annual Accounts for Xero users (and others) 30 June 2014

The end of the Financial Year is arriving very quickly and the four accountants in the Connexional Office will be entering their very busy season.  We have about 35 sets of annual accounts to prepare and most of these need to be audited or reviewed by external auditors. The auditors are arriving in the middle of July and not leaving us until the end of August.

Although we will be more than happy to answer questions and provide help, our time will be limited and therefore we would ask for your patience when it comes to replying to e-mails and providing support calls.

There are four ways that this year’s annual accounts can be prepared by you:

  1. Do as you have done in previous years;
  2. Produce a Profit and Loss (also called a Statement of Financial Performance) and a Balance Sheet (also called a Statement of Financial Position) from Xero and then add a set of Notes to the Financial Statements using either Word or Excel.
  3. Produce a Profit and Loss (also called a Statement of Financial Performance), a Balance Sheet (also called a Statement of Financial Position) and a set of Notes to the Financial Statements using “Annual Accounts”.  In Xero, you have to be an Advisor rather than a Standard user and you will also need an understanding of how this report pack works in Xero.
  4. Determine if you a Tier 3 or Tier 4 reporting entity under the new financial reporting system which will become mandatory from 1 April 2015 and start using that for the annual accounts to 30 June 2014.  That way you will have a better idea on what to do next year when it becomes a mandatory requirement.

Not producing any annual accounts is not an option as it is a requirement of Conference that annual accounts are prepared and sent to the General Secretary. I would refer you to Section 10:1.3.1 to Section 10:1.3.4 of the Methodist Law Book.

Option 1 does not require an explanation from me as you can simply do what you did last year.  If this is your first year using Xero and you want to use the Xero Profit and Loss and Balance Sheet as a basis for your annual accounts, then please do so.  If you are unsure how these work, then firstly read the help files in Xero or give us a ring and we will walk you through it.  Having said that, I need to warn you that from 1 April 2015 you will NOT be able to continue with what you have done in the past.  For most of you, you will need to determine if you are a Tier 3 or 4 reporting entity (see below).   Xero are working on report packs that will allow Xero users to produce Tier 3 and 4 annual accounts but this will not be ready until the end of this calendar year.

For Option 2, there are standard layouts for Profit and Loss and Balance Sheets in Xero that can be used directly or exported to Excel and then “tidied up” as you see necessary and then Notes to the Financial Statements produced and attached in either Word or Excel.  If you do not know what the notes to accounts look like, then let me know and I will send you a set of what they look like and you can adapt them, otherwise, look at the guidance notes for Tier 3 and 4 standards.

 For Option 3, you need to have a different level of access in Xero as this gives you access to an annual accounts report pack.  However, this report pack will need to edited and saved.  They are standard reports for trusts, companies, etc. and therefore do not fit into our needs (this will change next year!!!).  You may decide it’s too much work, given the changes that will happen next year.

 Option 4 is the best option moving forward as you are going to be required to follow these new accounting standards from 1 April 2015 anyway.  I have attached the Tier 3 and 4 Standards and Guidance Notes for you as well as an Excel template for you to use.

As already stated, we understand Xero are working on producing the new tier structure templates so from the next financial year you should be able to produce the new tier reports directly from Xero.

Am I tier 3 or 4?

In general and without going into too much detail, if your operating payments are under $125,000 to 30 June 2014 then you are Tier 4.  If your operating expenditure is between $125,001 and $2,000,000, then you are Tier 3.  If you are under $125,000 you can use Tier 3 if you want.

TIER 3

Tier 3 PBE SFR-A (NFP) – The Actual Standard in PDF format

Tier 3 Explanatory Guide A5 – PBE SFR-A (NFP) – Guidance Notes for the Standard

Tier 3 Template for PBE SFR-A (NFP) – UNProtected XLS Version MASTER – Excel Spreadsheet

Tier 4

Tier 4 PBE SFR-C (NFP)  – The Actual Standard in PDF format

Tier 4 Explanatory Guide A6 – PBE SFR-C (NFP) Final to Issue – The Guide in PDF format

Tier 4 Template for PBE SFR-C (NFP) – UNProtected XLS Version MASTER – Excel Format

Happy New Financial Year!!!!