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m501c3
November 16, 2023
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How to record transactions from a Charles Schwab account

  • November 16, 2023
  • 1 reply
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I keep the books for a nonprofit that has investments at Charles Schwab.  All the investments are short term, fixed income products that include CDs and US Treasury.  The investment terms range from 3 months to 2 years.

 

For the nonprofit's CD at another bank, the CD links to QB as a separate account, which allows me to easily record the opening of the CD as a transfer from bank account to CD account, and record interest as nonprofit income.  This appears to be working fine. 

 

However, the Schwab account has multiple CDs and Treasury investments with continuous maturities and reinvestments every few months.   Additionally, these investments do not show up as separate accounts in the "Manage Connections" under the Link Account tab.  It does not seem practical to create separate banks accounts for each CD, especially those that have very short term maturities.

 

Would greatly appreciate guidance on how to record transactions from this account. 

-Mark      

Best answer by Rainflurry

@m501c3 

 

It depends on how much detail you want or need on the NFP's balance sheet.  You can track the aggregate outside of QB and enter deposits in aggregate.  Personally, I would create bank sub-accounts for each fixed-income product and fund them/close them using the transfer function (New > Transfer).  Creating sub-accounts and transferring funds to them takes probably 30 seconds each which, even for a 3-month CD, is worth it IMO.  Also, creating them as sub-accounts allows you to roll up the sub-accounts into the Schwab Brokerage account on the balance sheet.  That allows you to see details if desired and roll them up if you want the balance sheet to look cleaner.  Small thing but accurate and tidy financial statements are nice.        

1 reply

Rainflurry
RainflurryAnswer
November 16, 2023

@m501c3 

 

It depends on how much detail you want or need on the NFP's balance sheet.  You can track the aggregate outside of QB and enter deposits in aggregate.  Personally, I would create bank sub-accounts for each fixed-income product and fund them/close them using the transfer function (New > Transfer).  Creating sub-accounts and transferring funds to them takes probably 30 seconds each which, even for a 3-month CD, is worth it IMO.  Also, creating them as sub-accounts allows you to roll up the sub-accounts into the Schwab Brokerage account on the balance sheet.  That allows you to see details if desired and roll them up if you want the balance sheet to look cleaner.  Small thing but accurate and tidy financial statements are nice.        

    M
    m501c3Author
    November 17, 2023

    @Rainflurry 

     

    Excellent solution.  The NFP balance sheet does not need a lot of detail.  I created a bank sub-account (savings) for one of the US Treasury investments and funded it with the transfer function.  Super easy.  I will continue this going forward for all the fixed income investments.

     

    If I could expand a little on the same question:  The NFP invests the interest earned from fixed deposits into Schwab Money Market shares until this balance is large enough to re-invest in another fixed income product.  At this point, the Money Market shares are sold.  This weekly or monthly cycle of transactions will appear in the bank detail as:

    >Spent column:  when purchasing MM shares

    >Received column:  when MM shares are sold

    >Received column:  interest earned from the MM shares

     

    The interest earned could be recorded as Non-Profit Revenue.  For the purchase and sale of Money Market shares, should I create a bank sub-account for the Money Market fund, and list these transactions as transfers back and forth to the Schwab parent bank account?

     

     

     

     

     

    Rainflurry
    Rainflurry
    November 17, 2023

    @m501c3 

     

    "For the purchase and sale of Money Market shares, should I create a bank sub-account for the Money Market fund, and list these transactions as transfers back and forth to the Schwab parent bank account?"

     

    Based on the fact that your NFP does not require a lot of detail on the balance sheet and because these are all fixed-income securities, I would just have a Schwab parent account with no sub-accounts.  That way, you can just create deposits when interest is earned and there are no entries needed for transfers.  That's my personal preference.  The more detail you have on the balance sheet, the more work to record individual transactions (transfers) that just offset (CD maturing, etc.).  Your Schwab statements will always suffice for detailed balances.  Just my $.02  

     

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