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gacpool
January 12, 2021
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How do I hold back funds for future improvements

  • January 12, 2021
  • 1 reply
  • 0 views

We did well last year and we want to allocate part of our fund towards a large improvement we are planning to make. We are a community pool and are saving to replace our pool liner. I have created a "capital improvement" account as a long term liability in my chart of accounts. Can I transfer a lump sum from revenue over to capital improvements? If so, how do I do that?

Thank you for any advice you could give.

Best answer by Jen_D

Thanks for getting in touch with us about this, @gacpool,

 

Allocating funds is an important part of your finances and books. With this, we always recommend consulting an accountant for proper accounting advice. If you don't have one, we can help find someone near you.

 

You can create journal entries to transfer funds from revenue to a liability account. See this:

 

Regardless, this step is something you have to confirm with a professional to ensure you're doing it right. 

 

Another option to save funds is creating a holding account to where you can put the balance from revenues. You will then use this account to pay off the liability when the project is done.

 

To create a holding account:

  1. Go to the Gear icon and select Chart of Accounts.
  2. Click New.
  3. Choose Bank for the Account type. Under Detail Type, pick Cash on hand.
  4. Then name the account Holding Account. 
  5. Once done, press Save and Close.

To move funds, you can use a journal entry debiting the holding account and crediting the revenue account. Then, when you pay for the liability, use a check. See this:

 

 

If you have additional questions about this, feel free to get back to me or mention my name. I'll be right here to help you anytime. Have a nice day!

1 reply

Jen_D
Jen_DAnswer
January 12, 2021

Thanks for getting in touch with us about this, @gacpool,

 

Allocating funds is an important part of your finances and books. With this, we always recommend consulting an accountant for proper accounting advice. If you don't have one, we can help find someone near you.

 

You can create journal entries to transfer funds from revenue to a liability account. See this:

 

Regardless, this step is something you have to confirm with a professional to ensure you're doing it right. 

 

Another option to save funds is creating a holding account to where you can put the balance from revenues. You will then use this account to pay off the liability when the project is done.

 

To create a holding account:

  1. Go to the Gear icon and select Chart of Accounts.
  2. Click New.
  3. Choose Bank for the Account type. Under Detail Type, pick Cash on hand.
  4. Then name the account Holding Account. 
  5. Once done, press Save and Close.

To move funds, you can use a journal entry debiting the holding account and crediting the revenue account. Then, when you pay for the liability, use a check. See this:

 

 

If you have additional questions about this, feel free to get back to me or mention my name. I'll be right here to help you anytime. Have a nice day!

G
gacpoolAuthor
January 14, 2021

Thank you! Yes, I am moving funds on advice of our accountant but I could for the life of me figure out how to do it in QBO. Making a simple journal entry is exactly what I needed to do. I appreciate you thorough  and quick response!

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