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Lyn725
June 8, 2021
Question

QBO fund accounting

  • June 8, 2021
  • 1 reply
  • 0 views

QBO church fund accounting - we use Classes as Funds - not sure what I’m missing... for example. When I capitalize an invoice to the asset account Building instead of expensing it, 

DR buildings (asset)

CR checking (asset) - building fund

 

at month end:

previous month Class balance + income - expenses = new month end Class balance 

since there isn’t an expense or income - the new balance is incorrect

 

in fund accounting software, you transfer asset to asset and fund to fund

in QBO the checking account is both your asset and fund balance?!

 

1 reply

john-pero
john-pero
June 9, 2021

Classes are probably not the solution to keeping track of separate funds. Class is a tag, and it can be used in  P&L By Class report but the Balance Sheet by Class that QBO allows is never right.

 

Instead you should consider sub bank accounts for the various funds and also have multiple bank accounts.  

 

Example, monthly donations of $10k with $1k designated Building Fund, $1k should be moved out of operating funds into the building reserve.

 

All funds should add to all cash on hand in any and all bank accounts (after reconciliation)

 

Classes let you see what is chargeable to various projects like missions, food bank, building, parson pay, etc but a class report won't show you what is not classified 

    L
    Lyn725Author
    June 10, 2021

    Thank you for your response. I should have said we use the checking accounts on the balance sheet to represent our fund balance. But at month end, I can not take prev. Month balance + income - expenses and have it equal the new balance in each fund in the checking. For example

    beg.bal.1.31.21 is 5000

    donations are.   +. 3000

    expenses are.    -  1000

    end bal is.             3000 which is correct, because 4000 was capitalized

    do I just add a column to force the balance? It makes it seem like something is incorrect when the traditional beg. Bal. +inc-exp=end bal does not work...my last church expensed everything, so it was correct. And so now I am confused. 

    G
    GlinetteC
    June 10, 2021

    Thanks for getting back to us, Lyn725.

     

    I can help share some information on how fund accounting works in QuickBooks Online. When using Fund Accounting in QuickBooks Online, you can use Class tracking and banking sub-accounts to track individual funds.

     

    In order to track funds, you'll need to complete each of the following steps:

     

    1. Turn on Class tracking.
    2. Assign a Class to each fund.
    3. Optionally set up a banking sub-account for each fund.
    4. Run a Profit and Loss by a Class report to review income and expenses.

    To learn more details, please check this article: Fund Accounting for non-profits.

     

    I'd still suggest consulting your accountant for further guidance. This way, we can ensure your books are accurate in QuickBooks Online (QBO).

     

    Please reach back out to me with any additional information on the issue so I can get you taken care of. Thanks for coming to the Community and take care.

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