A user cannot track functional classes (program, admin, fundraising ) if using* class* to track restricted/unrestricted funds. Do you recommend subclasses? Why this method over location tracking? Thanks!
I recommend classes/subclasses for the tracking of restrictions because the “roll over” / “close out” to the net asset (retained earnings) account in qb. For functional class coding I recommend modifying chart of accounts to include program, G&A and fundraising sections with the appropriate accounts /categories setup under each.
The balance “closes” by class so that the beginning balance is ending balance for prior fiscal year and net income is activity for current year. All activity has to be coded to class ON revenue and expenses ONLY. Do not class code asset/liability transactions!! If you are starting to use this process and need to “establish” the beginning balances I recommend entering a journal entry that impacts net asset account only and code opening balances by class. Net impact of that entry is zero to the net asset account. Now the restricted fund report will work!
I make my own report by running the statement of financial position (or balance sheet) by class and then collapse asset and liability sections so that only net assets (equity) accounts show by account number.
You are not explaining how you get this info on the balance sheet---obviously it would have to be a journal entry but isn't that the most critical part for good bookkeeping?
Hi! Actually the method described here does not require any journal entries. The transactions on the income statement will close out by class to the balance sheet when this is configured correctly.
Thank you very Much Terisa-this helps a lot!
Thank you! So helpful!
Wonderful. Thank you.
A user cannot track functional classes (program, admin, fundraising ) if using* class* to track restricted/unrestricted funds. Do you recommend subclasses? Why this method over location tracking? Thanks!
I recommend classes/subclasses for the tracking of restrictions because the “roll over” / “close out” to the net asset (retained earnings) account in qb.
For functional class coding I recommend modifying chart of accounts to include program, G&A and fundraising sections with the appropriate accounts /categories setup under each.
Good
On restricted funds. How do you get the balance into the equity accounts for the restricted funds so you what the balance is over a couple of years?
The balance “closes” by class so that the beginning balance is ending balance for prior fiscal year and net income is activity for current year. All activity has to be coded to class ON revenue and expenses ONLY. Do not class code asset/liability transactions!!
If you are starting to use this process and need to “establish” the beginning balances I recommend entering a journal entry that impacts net asset account only and code opening balances by class. Net impact of that entry is zero to the net asset account. Now the restricted fund report will work!
@@terisaclarkThank you! How should we track and reduce restricted fund balances for capital purchases like land and building in QuickBooks?
@@terisaclark Does QBO close by class automatically or is that through a journal entry for each class?
@@toddasper2685 It does close automatically!
Is the Net Assets report a custom report within QB?
I make my own report by running the statement of financial position (or balance sheet) by class and then collapse asset and liability sections so that only net assets (equity) accounts show by account number.
You are not explaining how you get this info on the balance sheet---obviously it would have to be a journal entry but isn't that the most critical part for good bookkeeping?
Hi! Actually the method described here does not require any journal entries. The transactions on the income statement will close out by class to the balance sheet when this is configured correctly.