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Level 3

Dealing with restricted and designated charitable funds

We are a UK registered charity. As such, we are required to distinguish in our accounts between three categories of income/expenditure: Unrestricted, restricted and designated.


How is it best to do this in QBO?


Dealing with restricted and designated charitable funds

Let me help you set up your accounts in QuickBooks Online, @garethhowell.


You can go to the Chart of accounts to set up your income and expenditure categories. In addition, I also suggest consulting an accountant to what account type and detail type should you deal with unrestricted, restricted and designated charitable funds. This is to make sure that you're creating categories accurately.


Once you determine their exact account and detail type, here's how to set up the categories:


  1. Hover to the Accounting menu and then select Chart of accounts.
  2. Click New.
  3. For expense, choose the Expense Account Type and select a category in the Detail Type. And for income, pick Income Account Type and then pick a category in the Detail Type drop-down. 
  4. Here's a visual reference:

  5. Name the account and enter additional details.
  6. Click Save and Close.

I'm adding this article for more details about keeping your categories organized: Add an account to your chart of accounts in QuickBooks Online.


Furthermore, you can read these articles to learn more about the accounts and detail types in your chart of accounts:


If you have more questions about the category set up in your chart of accounts, please let me know. I'll get back to help. Have a nice day and take care!

Level 3

Dealing with restricted and designated charitable funds

Thanks for the response. Maybe I didn't explain my question properly.


We've been using QBO for 2 yrs now and already have a chart of accounts that meets our needs and those of the charities comission. Due to the nature of our charity we've not had to account for restricted fuhnds before - it's all been unrestricted funding. We now need to add restricted funds.

I've see suggestions to use additional sub-accounts, classes and projects as a way to record and report. What I'm looking for are suggestions and examples of how others have dealt with this.

Level 1

Dealing with restricted and designated charitable funds

I have used the Classes device in two small charities I am Treasurer for.  Depends on subscription level you use whether it is available but if not there you can upgrade.  Useful link on web at How to Set up Restricted Funds in QuickBooks? (

Level 3

Dealing with restricted and designated charitable funds

Thanks for that. The problem is mainly with designated funds. With restricted funds, all the income is coming from donations and thus can be 'classed' when entered. With designated funds on the other hand, the 'income' comes as a result of a trustees decision - recored by means of a journal moving money from general to a designated class. The journals don;t seem to appear on some of the reports, so whilst expenditure of designated funds shows correctly, the resulting balane is always negative.


Dealing with restricted and designated charitable funds

Hello Gareth, We just wanted to add to this thread, in terms of journals not showing on some reports, what reports are they not showing on and what chart of account/sub accounts are you using on the journal? We can take a look at why it is not showing on your reports. As unrestricted/restricted/designated funds is getting into more complicated territory it may be worth consulting with an accountant for help with this. 

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