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Fund Accounting - Help For Charity with Multiple funders

Forum|Forum|6 years ago
January 23, 2020
3 replies
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Hello,

We are a smallish charity and have recently signed up for Quickbooks Plus. We currently do not have a finance officer and I have been given the task of setting up Quickbooks so we can use it going forward as our finance package.

We have a bank account that payments come in to and cheques go out of and a few direct debits. We use a credit card for other transactions (this is in turn paid in full each month)

I want to get QBO, to track not just our overall income and expenditture, but also by each Service that we offer, which is funded by funding from trusts, foundations and/or contracts.

I have been trying to find out how to set up fund accounts for each of our sevice areas, but I can find nothing about it in any menu. Can someone please help?

QuickBooks Online

Best answer by EmmaM

Hello JayneRobinson

Thanks for reaching out to the Community. There is not a menu on how to set this up however we can go through this with you.

Generally users who are charity accounts and receive funding grants for example that are then used for projects/expenses.record the grant as a current asset(unless it is something which is not going to be used in one year and then another asset type would apply)and then when you have expenses for projects in the payment account you select the asset account you set up for the funding grant for that service area.

When you mentioned service areas you can name each asset with the service area as the name.You can either add the balance in the chart of account when you set it up or do a deposit to the asset when funding is received for that service area.

We welcome any other Community users who have charity accounts to add to this thread if they have an further advice

Any questions let us know

Emma

E

EmmaMAnswer

Hello JayneRobinson

Thanks for reaching out to the Community. There is not a menu on how to set this up however we can go through this with you.

Generally users who are charity accounts and receive funding grants for example that are then used for projects/expenses.record the grant as a current asset(unless it is something which is not going to be used in one year and then another asset type would apply)and then when you have expenses for projects in the payment account you select the asset account you set up for the funding grant for that service area.

When you mentioned service areas you can name each asset with the service area as the name.You can either add the balance in the chart of account when you set it up or do a deposit to the asset when funding is received for that service area.

We welcome any other Community users who have charity accounts to add to this thread if they have an further advice

Any questions let us know

Emma

M

mrachelcooper

Hi Emma & Jayne

My understanding was that people generally used classes to tag different funds, having an overarching class each for restricted and unrestricted funds, and then having subclasses within that. That way you can easily run income and expenditure reports by fund and see what you've got in each pot

I don't understand how the accounting on Emma's suggestion works - but I'd love to because it might solve my multidimension problem. My concern is that it would involve quadruple entry for each transaction. Please can you explain how it works - when you receive money, it comes into cash and you show it as income, and when it goes out, it goes out of cash and is shown as an expense. So do you set up an asset called "grant from x" and a creditor called "fund left in grant from x" and every time you spend money, say on salaries, & it goes out of the bank account, you do those tranactions as normal but also credit grant from x and debit fund left in grant from x? I can see that it would allow you keep tabs on it, but I was hoping for something neater.

Thanks

Rachel

P

Pete Brookes

What would be REALLY useful is for the Income & Expenditure of a given fund (class / category) to update the restricted funds account (Equity). At present, we have to run the income / expenditure of a given class and put through a journal entry to amend the balance of the fund account (equity). Rather messy in the 21st century when it could be just as easy to have the software do it!

M

mrachelcooper

Hi Jayne

The other thing I would suggest is asking around to see if there's a local community accountancy service in your area - they are set up to help small charities, and if you ask your local member of NAVCA they can point you in that direction. There's one call WYCAS that has great guidance that is charity focussed. QB can be great for small charities, and but it's good to find someone to help with the workarounds you need to make it work.

All the best

Rachel

A

ASF

There is a firm called Community Accounting Plus ("CA Plus") who are Independent Examiners for charity accounts, and I think they are QB Pro advisers, and also are licencors for QB products.

If folks like those can't assist, I would not b sure who can. They are based in Nottingham, but these days, geography doesn't really matter too much!

Tony

M

mrachelcooper

CAPlus are fantastic - and they are prepared to offer support outside the Notts area.

A

ASF

I too confess to struggling a little bit with categorising a funding grant received as anything other than income? That, said many of ours don't run for more than 12 months, and even if they did, depending on accounting rules for charities, you would still have to find a method for releasing "Year1, Year 2, etc" portions to income. When I talked with CA Plus about having the same problem, they recommended using an Account in the P&L called something like "Restricted Grants" and setting up classes for some (but not all, as the number of Classes would disappear off into the sunset!!). Then, you can just filter the report to see the particular Grant you are looking for at any time. Works quite neatly for "Outcome Reporting" we are finding and I agree with others, this is not a particularly great solution for many, many restricted, and/or multi-funder grants, but will have to do for now, until Intuit dream up something more workable and "built-in" 😁

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