Separate Charity Funds with QB

I am setting up a charity with several restricted funds on QB. I have set up the Class Lists with the various funds so that we can view separate P&L accounts and set up budgets for the various funds. I understand that the Class List does not help with analyzing the B/S into the various funds, so I have set up sub-accounts for the bank so that income and expenses can be paid to and from the relevant fund portions of the bank account and I can view the bank balance due to each fund. In addition, I have set up separate retained earnings accounts for each fund to which retained earnings brought forward have been allocated, and the intention is that at the end of each year, any additional retained earnings is transferred from the normal retained earnings account to the individual funds retained earnings accounts which I have set up. Is this a reasonable way of dealing with the bank and retained earnings accounts, and does anyone know a more efficient way of dealing with them?

Thanks in advance

SamJay

Comments
coolmanwithbeard's picture

Hi SamJay

coolmanwithbeard | | Permalink

Hi SamJay

 

I suppose it epends on the size and complexity of your charity - I do a lot of charities on QB and only really set up classes/funds for P&L and hold the restricted fixed assets seperately.

It sounds like you have only one bank account - you will know your fund balances and they will alll be in there so I think I would findthe sub accounts confusing and irksome. It does require a little off QB record keeping but means that day to day the software is usable.

As QB will not produce charity accounts format as long as QB retained earnings matches my final SOFA I'm happy.

The only thing I can't track in year just from QB is overall fund balances - but a note of each opening balance and a P&L by class quickly enables you to check. QB exports to excel for a quick review are very good and will get better

 

I have had no complaint from my charity clients when I set their copies up this way - as it's straightforward to use - which is what QB is all about

 

Mike

Hi Mike

SamJay | | Permalink

Hi Mike

Thanks for your prompt response. You are correct in that there is only one bank account. There  are 8 restricted funds in addition to the unrestricted, so I take your point that it will be easier to make entries without having the 9 sub-accounts. Is there any point to having just 2, one for unrestricted, the other combining all unrestricted?

What do you mean by you "hold the restricted fixed assets separately"? 

"The only thing I can't track in year just from QB is overall fund balances - but a note of each opening balance and a P&L by class quickly enables you to check. QB exports to excel for a quick review are very good and will get better"

So based on the above, should there be a problem if I have 9 separate retained fund accounts to include the opening balances and just transfer from the general retained earnings to them at the end of each year, using the P&L by class to check in year what changes have occurred.

Thanks

SamJay

 

coolmanwithbeard's picture

Hey SamJay

coolmanwithbeard | | Permalink

Hey SamJay

Ultimately I just use the single bank account its simpler throughout the year and it doesnt sound like you are looking at a complex structure - always go for what will work simply and effectively.

One clear rule I have though is that the general fund also has a class. So any transactions without a class are listed seperately on the p&l and can be investigated.

With regard to fixed assets, the nature of fixed assets bought with restricted funds is such that either the funds remain restricted even after the asset is bought - or in some cases merely buying the asset is deemed to have satisfied the restriction.

Where the funds remain restricted and depreciated through the restricted fund I tend to keep those fixed assets in either a seperate pool or just as an item on their own

Your 9 retained fund accounts should work - although again I don't bother as I have the information in the annual accounts

 

Mike

Classes in the balance sheet

Martin Telfer | | Permalink

It is possible to use classes to record transactions in balance sheet accounts, although not all transaction types (for example, cheques and customer receipts) allow you to enter a calls for both sides of the entry.  I use classes, for example, with property clients to keep a copy of the cost of their investment in each property.  To get a balance sheet split by property, you need to set it up as a summary report instead of in the usual way. 

In very small sets of books, when I have wanted a full balance sheet divided by class, I have just posted all transactions as general journals, so that a class can be applied to each line.

 

Thanks for your help Mike and

SamJay | | Permalink

Thanks for your help Mike and Martin

I will bear in mind what you have both said. 

 

SamJay

QuickBooks 2012 now has Balance Sheet by Class

alisonatintuit | | Permalink

Hello,

I was just reading this string, and wanted to make this group aware that QuickBooks 2012 now has Balance Sheet by Class functionality.

There are some caveats though... when you upgrade, you will need to make sure you assign the Classes to the balance sheet account transactions that were previously unclassified. (this is because no software programme is psychic - you have to tell it which class things belong to.)  In addition, it is best if you input transactions going forward, with only ONE class per transaction. This is because if you input multiple classes, QuickBooks might have trouble down the line with partial payments (which class does it allocate them to? etc.)  So if you stick with the rule - one class per transaction - you will always have clear Balance Sheet by Class reports, and never have to re-allocate something due to a split transaction or partial payment.

There is an excellent Help file document you can download in QuickBooks 2012 - just click Help and then enter Balance Sheet by Class.  I recommend you read it before you turn on that functionality, just so you understand the best way to use the feature.

Bottom line - it is worth taking a look at, and should help you with accounting situations as described above.

Alison Ball

Head of Accountant Programmes, Intuit UK

 

Thanks Alison for the update

SamJay | | Permalink

Thanks Alison for the update on the QB 2012 Balance sheet by class feature.  

one clarification...

alisonatintuit | | Permalink

This feature is only available in QuickBooks Premier 2012 (not in QuickBooks Simple Start, Pro, or QuickBooks Online versions).

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