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How to handle a fund that is both an expense item and receives designated donations?

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  • How to handle a fund that is both an expense item and receives designated donations?

    Using QuickBooks Premier for Non-Profits

    I am the treasurer for our denomination's regional area (Eastern Pennsylvania).

    I am still trying to get everything up and running. I have set up several Classes: Unrestricted Admin, Church Planting, etc. My Balance Sheet by class seems to be working very well. I still need to do some things to get the P & L Statement to look right.

    The challenge is that we have several committees, many of which have their own budget line item: Church Planting, Church Health, etc. I merely have to show each committee's expenses compared with their budget. This all works fine. The problem comes up when I have many churches donating directly to the Church Planting Fund which is supposed to be reflected in the Church Planting committee now having additional money to spend in their budget. I had tried adding the additional funds to their expense account, but that seemed to hide both the monies already spent as well as tracking the extra donations that have come in.

    Can anyone give me some advice on what is a good way to handle this?

    Thanks in advance!

  • #2
    A donation is income, and should be booked that way. The restricted funds for the planting committee should be held in its own bank account, where you deposit the donation received. Then the bank account will show funds on hand, and the expense accounts will show what was spent

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    • #3
      There may be (but possibly not be) a more simple way to do what you want, but the procedure depends upon how many bank accounts you have. My question: How many separate bank accounts does the denomination's regional church planning committee have? What I may suggest is that there is a more simple way to track separate funds in QuickBooks than by having a separate bank account for each fund.
      Lorin Browning, Ph. D.
      Fellow -- National Tax Practice Institute

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      • #4
        You need to use a bank account for the donation received. The donations that they get will go in that account and expenses can be used up from that account.

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        • #5
          To deal with agraian's original post: Run a Profit and Loss by Class. This is a canned report that works even better when using filtering by Type of Class. Intuit has already given you the desired tool. Not only does the Class tool work well for Balance Sheet accounts (as you have discovered), it also works with Income Statement accounts.
          Lorin Browning, Ph. D.
          Fellow -- National Tax Practice Institute

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          • #6
            Restricted funds are monies set aside for a particular purpose as a result of designated giving. They are permanently restricted to that purpose and cannot be used for other expenses of the nonprofit. By contrast, unrestricted funds may be used for any legal purpose appropriate to the organization.

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