MLS suggestion: Booking Date & Value Date for MLS transactions

Dear Brothers & Sisters,

Having a university degree in business administration and through my working experience in the treasury department, I will make the following suggestion for the MLS finance system.

Professional Bank Principal:
If we look at our own private or business bank statemant, we recognize two dates for each transaction. The first date is the booking date. That means the date when the transaction has been booked into the banking system. The second date is the value date. This means the date when actually the money has been transacted.

My suggestion is two apply that same principal to our MLS finance system, because in most cases we also have for each transaction two different dates.

1. example: “Paying tithing via cash”
A member comes on Sunday (September 20th) to the church and pays cash his tithing to the bishop. The finance secretary receives the money from the bishop and enters this tithing as an income/receipt to the ward for that Sunday. In most areas in germany this money will get to the bank the day after (on Monday the 21st).

2. example: “Paying tithing via cheque”
A member comes on Sunday (September 20th) to the church and pays his tithing via a cheque to the bishop. The finance secretary receives the cheque from the bishop and enters this tithing as an income/receipt to the ward for that Sunday. The day when the church will actually receive the money is several days later (for example Wednesday 23rd).

3. example: “Reimbursement to a member for church expenses”
In some cases the church reimburses members for their expenses. Either the church unit uses a transfer form or cheque. The finance clerk will book that expense on Sunday 20th into MLS, but the day when the money actual went from the church account to the member via bank transaction is several days later.

=> Final conclusion: Every transaction has in most cases two different dates!

Now what would be the advantage of entering two dates (booking date & value date from the bank account) into MLS?

=> The finance clerk has a better overview on any open or incomplete transaction! He could then run easily a report in MLS to show him those incomplete transaction where he might have to check them. At the moment the finance clerk will get only once a month from the administration office a note of any incomplete transaction (see action report).

Please let me know, what you think of this idea.

Best regard

Thorsten

thorsten_GER wrote:Please let me know, what you think of this idea.

Personally, I think it complicates things. I don't know how it works in Germany, but here's how it works in the U.S.:

For donations, the clerk simply records and deposits the funds into a special deposit concentration account where the funds are immediately swept (removed) by the church. The clerk need not be concerned about the balance of the account. If anything is returned, then it is handled.

In the case of checks written, currently that function seems to have a bug, but the funds are considered withdrawn the moment the check is written and if needed, the clerk can later look to see if the check cleared. The statements that the clerk receives from CHQ always matches what's in MLS. Unless someone is claiming they haven't been paid, the clerk has no need to know when the check actually cleared. The only balance the clerks sees is how much budget is left, not how much the bank has disbursed.

I can see how a this wouldn't work if the deposit and/or unit account was in a normal bank instead of using the deposit concentration/church account. But even then, I'm not sure what advantage there is of a date over a simple flag that says "cleared". I certainly don't use anything more complex in my own finances. And most financial clerks do not hold any accounting credentials or degrees.

Thanks for your comment and your interest in my suggestion.

In Germany or Europe MLS works a little bit different.

We use mainly bank transfer forms and give those forms filled out to the bank. This is due to the fact that we use no checks and therefore we do not print out checks out of MLS. We even have some test units which use electronic banking.

In general we have the payment transaction separated from the MLS system.

The consequence of this is that some clerks tend to enter the expense into MLS once the payment has been processed through the bank in order to be sure that everything went all right. The clerk (the bishop) receives then every week a bank statement directly from the bank. The clerk compares then the entries made in the MLS system with those posted on the bank statement. If we would have two dates for one transaction, then the clerk could do the follow up on those executed payments via running a special report in MLS.

So in general, we always have two dates for each receipts or expense. It is a very simple principal and easy to handle.

Regarding the flag as a symbol for "cleared" I have to mention that this is not in accordance with the accounting principals and even not in accordance with auditing requirements.
Every accounting activity needs to be comprehensible by third person. That third person could be the stake finance clerk, priesthood leaders, auditors or even tax authorities.
You can easily make a mistake by setting a flag on one expense, although you meant to mark the expense one line above. If you have a date, then you and the third person can check very quickly whether that is correct or not and you do not need to search very long.
I can speak of my own experience, since I am called as an assistant area auditor for the church in the german & switzerland area.

Another advantage of having two dates in MLS is that you can actually control and check your current situation by yourself and are not so depend on the administration office. And this will also help to ease the load from the administration office.

Two new topics were added to this thread. Note that the Code of Conduct says: "Do not start a new topic in an existing thread; instead start a new thread."

To avoid confusion, I moved those two new topics to individual threads:

• MLS Suggestion: Entering a purpose note for "other" income/receipts
• Cleanup of Budget accounts

Alan_Brown wrote:Two new topics were added to this thread. Note that the Code of Conduct says: "Do not start a new topic in an existing thread; instead start a new thread."

To avoid confusion, I moved those two new topics to individual threads:

• MLS Suggestion: Entering a purpose note for "other" income/receipts
• Cleanup of Budget accounts

Thanks for cleaning up.

RussellHltn wrote:Personally, I think it complicates things. I don't know how it works in Germany, but here's how it works in the U.S.:

For donations, the clerk simply records and deposits the funds into a special deposit concentration account where the funds are immediately swept (removed) by the church. The clerk need not be concerned about the balance of the account. If anything is returned, then it is handled.

In the case of checks written, currently that function seems to have a bug, but the funds are considered withdrawn the moment the check is written and if needed, the clerk can later look to see if the check cleared. The statements that the clerk receives from CHQ always matches what's in MLS. Unless someone is claiming they haven't been paid, the clerk has no need to know when the check actually cleared. The only balance the clerks sees is how much budget is left, not how much the bank has disbursed.

I can see how a this wouldn't work if the deposit and/or unit account was in a normal bank instead of using the deposit concentration/church account. But even then, I'm not sure what advantage there is of a date over a simple flag that says "cleared". I certainly don't use anything more complex in my own finances. And most financial clerks do not hold any accounting credentials or degrees.

I am not sure, but could it be that in the US you have the only bank connected to the MLS/CUBS system directly?

I think in most countries in the world you do not.

From this perspective you have more people doing a manual reconciliation between MLS and the local bank account. In for this, it is much better to be able to enter two dates for booking date in the MLS system and value date of the bank transfer.

In Europe we get only once a month an action report from the administrative office to double check the reconciliation. If the MLS would have both dates, the ward clerk can identify issues on the reconciliation much quicker.