Sage 100 Fund Accounting (formerly MIP Fund Accounting) Tips and Tricks: Running a Monthly Trial Balance

Sage 100 Fund Accounting (formerly MIP Fund Accounting) is a complete nonprofit financial management solution. From fund accounting to grant management to human resources, Sage 100 Fund Accounting offers an intuitive solution that helps nonprofit organizations achieve greater accountability, effective financial management and program success. Its special features – which include budgeting, forecasting, grant management and financial planning tools – make financial management easier on organizations, freeing up valuable time that can be devoted to planning new programs and events.

The key to successful nonprofit financial management is spending time with your organization’s overall trial balance. More times than not, nonprofit organizations allow the overall financial picture of the organization to take a back seat to compliance by way of their expenditure reports to the fund source. In order to regain control over their finances, nonprofit organizations need to learn how to run a monthly overall trial balance in Sage 100 Fund Accounting.

The following steps outline the monthly trial balance process for Sage 100 Fund Accounting. Make sure that you follow this process each month to ensure your financial success and to prevent unwelcome audits.

How to Run an Overall Trial Balance in Sage 100 Fund Accounting

  1. Get all of the transactions into your Sage 100 Fund Accounting system for the month.
  2. Complete all normal cost allocation processes and ensure those allocation entries are entered. With the Sage 100 Fund Accounting Allocation Management module – this is a simple transfer entry into the general ledger after you run the allocation routines.
  3. At this point, you are ready to complete your bank reconciliations and make certain the reconciled balance agrees with the book balance.
  4. Create an overall trial balance for the month-end. In the final analysis – and BEFORE you prepare and file the expenditure reports with their fund sources, it is very important that you create an overall trial balance for the month-end. It looks something like this:

MIP-Fund-Accounting

Critically look down the page and make sure asset accounts have debit balances, and liability accounts have credit balances. Ask yourself if the balances look reasonable based on your knowledge of your organization. Debits in a liability account indicate you may have overpaid something.  However, credit balances that are significantly higher than expected in a liability account can be even more dangerous.  Either you did not pay a liability when it was due, or you over-expensed something to the grants. Both situations are bad and more than likely you won’t notice it reviewing your revenue and expense statements. A higher than normal credit balance can be a significant problem in the grant-funded world.  The reality is this: If the Balance Sheet account balances on a month-end Trial Balance are not substantially and materially correct – there is no way that the revenue and expense balances can be materially correct.

In the world of federal grants, when errors of this nature go un-noticed, there is a likelihood there will be audit findings. Don’t let your auditor be the one who finds an error of this nature. Make sure you always print an overall trial balance at each month-end, take a look down the columns to be sure the assets are debits, the liabilities are credits, and that the balances make sense to you. This process should be added to every organization’s month-end checklist, and MUST BE completed prior to the preparation of your expenditure reports for the month!!  It seems like a simple step, but it is commonly overlooked. This omission can lead to some pretty serious consequences, so don’t let it happen to your organization!

Take advantage of the exciting new features in Sage 100 Fund Accounting 2013 to effective manage your organization’s funds, grants and expenses. Learn more about the updated solution here.