Handling deposits into multiple bank subaccounts - non-profit fund accounting

sbalmos · ‎January 04, 2024

I have recently set up Quickbooks Online for our non-profit community band, and have set up two bank checking subaccounts in the COA under our linked checking account - "Unrestricted" and "Restricted - Equipment". This is in line with step 3 of https://quickbooks.intuit.com/learn-support/en-us/help-article/accounting-standards/fund-accounting-.... Before anyone asks, I also set up two matching classes, as described earlier in that article.

My question is how to handle depositing into these separate subaccounts when really only one physical bank deposit transaction occurred - a deposit into the parent bank checking account. Let's take an example of a member who paid their $40 dues (lands in Unrestricted), and then donates another $100 - $75 for the Restricted and $25 for Unrestricted. I would create a Sales Receipt with 3 line items, depositing into Payments To Deposit.

$40 - Membership Dues (class Unrestricted)
$25 - Donation (class Unrestricted)
$75 - Donation (class Restricted)

The first problem comes when creating a Bank Deposit later. A Bank Deposit only goes into one checking account, and Quickbooks only shows a single Sales Receipt to add - the total $140 paid by the member. I cannot split the Sales Receipt to be deposited into separate Bank Deposits, if I were to make one Bank Deposit going into the Unrestricted subaccount and another Bank Deposit going into the Restricted - Equipment subaccount.

Even worse, even if I manage to somehow create two Bank Deposits - maybe without using a Sales Receipt to begin with, but just adding category records attributed to the donor, or by creating two Sales Receipts to the donor separated by Unrestricted vs Restricted - when I go to match the Bank Deposit records against the downloaded bank transactions, I can only match against a single Bank Deposit. I can't match multiple Bank Deposits against a single combined bank transaction record.

The only thing I can think of is maybe weekly, monthly, etc I manually run a income by class report to see how much was "sold"/donated into each class, and add a Transfer record from the parent bank account into each subaccount with the appropriate amount. This seems janky.

Any other ideas?

SirielJeaB · ‎January 04, 2024

I appreciate your detailed concern, sbalmos. I'll guide you through the process of recording your transactions.

When making a sales receipt with three line items, you'll need to post it in the Undeposited Funds account and ensure to assign the three transactions to the appropriate classes.

Once done, let's record a bank deposit. Please follow the steps below:

Choose the parent account from the Account dropdown button.
Tick the sales receipt you've made in the Select the payments included in this deposit field.
In the Add funds to this deposit tab, add two lines for the restricted and unrestricted subaccounts, divide the amounts appropriately, and put the amounts as negative.
Ensure that the total of the bank deposit is 0.00.

See the screenshot below for visual reference:

Concerning your downloaded transaction, there's no need to match it but rather to exclude it and manually clear the deposit in your chart of accounts.

However, if you want to match your bank transaction, you should create the bank deposit in the usual way and match the downloaded transaction. Afterward, create a Bank Transfer to move the money into the Restricted and Unrestricted subaccounts.

You can also use bank rules to automatically categorize transactions from your bank.

The Community is available 24/7 to assist you. Please get back if there's anything else you want to ask. Take care.

sbalmos · ‎January 05, 2024

I had a feeling this was the answer. Both suggestions are ultimately variations of create-compensating-transactions that I described. Your second answer is the same as what I originally mentioned - make manual Bank Transfers at some interval from the parent into the subaccounts.

Out of curiosity for a more general scenario, let's say a business (nonprofit or for-profit) has two completely separate checking accounts at separate banks. Again, one Sales Receipt to a customer for a combined total that has to be split-deposited. Apparently the general answer is "QuickBooks cannot split a Sales Receipt into multiple Bank Deposits". So at some point, as you mention, you're going to have a transaction mismatch on the downloaded bank account deposit transactions that you just have to not match and ignore, because the workaround is to create only one Bank Deposit, to one of the bank checking accounts, with a compensating line item to simultaneously "deposit" into the other bank checking account.

AMRoC_Fab_Lab · ‎June 26, 2024

This would be SO MUCH easier if QuickBooks would simply put in the Received Payments page a selection for which sub-bank account each payment is to be assigned to. Then after QB does its automatic deposit, you can easily manually assign which payment included in the deposit should be assigned to which sub-bank account. Come on QuickBooks, you can do this. It would be a great feature to add to your next update!

AMRoC_Fab_Lab · ‎June 26, 2024

This would be SO MUCH easier if QuickBooks would simply put in the Received Payments page a selection for which sub-bank account each payment is to be assigned to. Then after QB does its automatic deposit, you can easily manually assign which payment included in the deposit should be assigned to which sub-bank account. Come on QuickBooks, you can do this. It would be a great feature to add to your next update!

JoesemM · ‎June 26, 2024

We appreciate your suggestions and understand the importance of having this feature to put a sub-account for each payment and deposit it automatically to the assigned bank, AMRoC_Fab_Lab.

We truly value and welcome your feedback and suggestions regarding our products. For any comments or ideas for new features, we encourage you to submit them directly to our product engineering team using the following process:

Go to the Gear or Settings icon and select Feedback.
Enter your comments or product suggestions.
Click Next to submit feedback.

Our Product Development team will receive your feedback directly to enhance your overall experience with the QBO. You can keep track of all the suggestions you submit through this channel: QuickBooks Online Feature Requests.

For more details about recording deposits, see this article: Record and make bank deposits in QuickBooks Online.

I'll be providing some resources that can help you match your bank transactions and reconcile your accounts in QuickBooks:

Should you have additional questions about making deposits or any feature request in QBO, leave a comment below. I'm always here to help. Stay safe.

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Handling deposits into multiple bank subaccounts - non-profit fund accounting